CHAPTER 2. CONTEXT FOR A SYSTEM-WIDE ENVIRONMENTAL AND SOCIAL
SUSTAINABILITY FRAMEWORK.........................................................................................................17

2.1 Examples of Environmental and Social Risks and Opportunities.................................................17

2.2 Internal Developments and Expectations of Environmental and Social Sustainability.................17

2.3 External Developments and Expectations of Environmental and Social Sustainability...............19

CHAPTER 3. KEY FINDINGS FROM THE INTER-AGENCY REVIEW ON ENVIRONMENTAL
AND SOCIAL SUSTAINABILITY...........................................................................................................21

3.2 Application of Environmental and Social Sustainability Measures across Three Entry Points....21

3.3 Where We Are Today...................................................................................................................22

3.4 Benefits Associated with the Use of a Common Environmental and Social Sustainability
Framework..............................................................................................................................................24

3.5 The Opportunity Costs of not Developing a Common Framework for Environmental and Social
Sustainability...........................................................................................................................................25

3.6 Synergies between the Framework for Environmental and Social Sustainability and ongoing
Work led by the Issues Management Group on Sustainability Management.........................................26

CHAPTER 4. FUTURE CONSIDERATIONS FOR A COMMON ENVIRONMENTAL AND
SOCIAL SUSTAINABILITY FRAMEWORK..........................................................................................27

ANNEX E: Table of Environmental and Social Sustainability System Founding Documents and
Principles.....................................................................................................................................................45

A Framework for Advancing Environmental and Social Sustainability in the UN System - August 2011

FOREWORD BY THE UN SECRETARY GENERAL

To be developed subject to approval of the report by EMG SOM 17

PREFACE BY THE CHAIR OF THE EMG

To be developed subject to approval of the report by EMG SOM 17

A Framework for Advancing Environmental and Social Sustainability in the UN System - August 2011

JOINT STATEMENT BY EXECUTIVE HEADS OF EMG MEMBERS

on

Advancing Environmental and Social Sustainability in the UN System

We, the Executive Heads of Agencies, Funds, Programmes and Departments, of the United Nations,

Are convinced that the promotion of human well-being and global sustainability hinges on environmental
protection and social and economic development,

Bear in mind the responsibility of the United Nations system to embody the internationally accepted
environmental and social principles in its internal management as well as to support their application by
partners and stakeholders; and the need to reduce risks and unintended negative impacts, and maximize
benefits to people and their environment in a coherent and integrated way within the UN system,

Are conscious of the efforts by those United Nation system entities that have already developed
environmental and social safeguards to mitigate the environmental and social impacts and risks of their
activities before the adoption of a common approach to advancing environmental and social sustainability
in the United Nations system,

Are mindful of the need for the UN system to internalize the internationally agreed norms of the
sustainability agenda at the level of policy/strategy, programme/project, and facilities/operations
management through a common framework for environmental and social sustainability, including through
safeguards, risk management, institutional learning, capacity-building, simplification, coherence, and
transparency,

Are recognizing the wealth of experience across the UN system to ensure the environmental and social
impacts and risks of activities are well managed, which has informed the development and adoption of
this common approach,

We hereby commit ourselves, proceeding in a phased manner, to use the Framework for Advancing the
Environmental and Social Sustainability in the UN System annexed to this statement as a means of
furthering the organizations sustainability performance, including by:

(a) Moving our respective organizations towards strengthening environmental and social
sustainability in our activities, and to endeavor to find the necessary resources to realize the increased
efficiency and operational safety gains of such a common approach; and

(b) Supporting the further development and implementation of a UN system-wide framework for
environmental and social sustainability including environmental and social safeguards; for monitoring
collective efforts; and for reporting back to the Governing Bodies of our respective organizations on
progress made, good practice, and lessons learned.

We make this commitment with a view to show leadership by increasing institutional accountability for
the environmental and social sustainability of our activities. We do this to further enable the UN system to
work smarter and safer, respond more effectively to emerging issues and stakeholder needs, and better
harness lessons from shared experience.

Annex to joint statement by Executive Heads of EMG Members

A Framework for Advancing the Environmental and Social Sustainability in the UN System

Vision

The environmental and social sustainability of the UN is enhanced, thereby contributing to its mission to
promote and protect human well-being in line with internationally agreed declarations, conventions,
standards and covenants.

Rationale

The UN system has a long history of promoting positive environmental and social outcomes. While
many parts of the organization have individually internalized sustainability goals, the UN acting as One
can do even more.

By developing of a common environmental and social sustainability framework, the UN will strengthen
its leadership role and better support Member States to further the global sustainability agenda at all
levels. Specifically, the framework allows the organization to:

- Lead by example: by enhancing institutional capabilities and credibility through strengthening the
internalization of the environmental and social principles it advocates, thereby contributing more
effectively to the achievement of internationally agreed goals and targets related to sustainability;
- Work safer and smarter: by reducing risks and maximizing benefits through an integrated approach
to informed decision-making;

- Respond more effectively: by better addressing emerging issues and stakeholder needs in a timely
manner, and by being an attractive and trusted implementing partner;

- Leverage knowledge and experience: by improved information sharing and working in a more
efficient, coherent, accountable and transparent manner.

Objective

The UN system enhances its sustainability by internalizing internationally accepted environmental and
social principles at the three entry points of policy/ strategy, programmes/ projects and facilities/
operations through individual and collective approaches that address associated risks and maximize
opportunities.

Expected outcomes

Outputs for individual entities

1. Enabling Conditions

Enabling conditions are strengthened and
established for the internalization of
internationally accepted environmental and social principles within UN entities.

a) A clear, coherent vision and policy is established that
relates environment and social issues to the mission and
work of the organization.

b) Internal capacities to implement the vision and policy,
and raise awareness among staff to ensure environmental
and social sustainability is embraced.

c) Adequate resources are available to achieve the
institutional goals of the vision and policy.

d) A continuous cycle of improvement by reviewing the
effectiveness of outcomes and activities in order to enhance
the organizations environmental and social performance.

2. Implementation entry-points

Environmental and social considerations are systematically integrated into service delivery mechanisms
to achieve desired results, using the following three management entry-points to encompass the work of
the UN system:

Policy / Strategy

UN system supports the development of
policies and strategies that embed a
broad view of sustainability and avoid
unnecessary trade-offs or harm to people
and the environment.

a) A process for integrating environmental and social
sustainability considerations into relevant policies and
strategies is implemented, for example through conducting
or supporting strategic level assessment.

Programmes / Projects

Environmental and social considerations
are systematically integrated in all
programme and project cycles including,
for example, through the use of
environmental and social assessment.

a) An environmental and social assessment framework
(including safeguards) is developed and implemented that
includes screening, review, management plans, monitoring,
accountability and transparency.

b) The consideration of environmental and social
performance objectives is integrated into existing
management approaches, such as partnerships and networks.

Facilities / Operations

Procedures and practices for integrating
environmental and social considerations
into management practices and support
systems for operations, premises, travel,
procurement, and use of information
technology which contributes to
sustainable development.

a) A sustainability management system is established which
encompasses measures for moving the UN entity towards
climate neutrality.

b) Sustainable practices in building management,
procurement and information and communication
technologies are developed.

c) Sustainable practices to address areas not covered by the
Sustainability Management strategy, such as social aspects
of facilities and operations management, are developed.

Collective Actions

1. Demonstrate system-wide commitment for the advancement of environmental and social
sustainability of the UN system through support for a common approach to the use of
environmental and social sustainability measures as outlined in the proposed framework.

2. Adopt minimum requirements for the internalization of environmental and social sustainability measures across the three entry-points.

3. Keep the advancement of the use of environmental and social sustainability measures under
review and continue the sharing of knowledge and lessons learned among UN entities to
strengthen coherence and leverage efficiencies.

4. Consider the need for a support and knowledge sharing function to assist UN organizations to:
1) internalize enhancement of their environmental and social sustainability measures, 2) build
capacity and share learning; 3) centralize accountability, reporting and evaluation.

EXECUTIVE SUMMARY

The Environmental and Social Sustainability Framework strives to carry the institution beyond the
typical safeguard measures of do no harm to also identify ways to do good. In the spirit of One
UN, the Framework takes a holistic view of the organization's work from policy conception through
programme implementation and internal operations management, providing a broader base of knowledge
for smart decision-making. The initiative looks to build on the internationally agreed sustainability norms
and principles of the last 30 years by adapting the best practices of environmental and social assessment
procedures and management systems to UN system activities.

This effort started when the Senior Officials of the Environment Management Group (EMG)
decided at their 15th meeting in September 2009, to undertake a consultative process and prepare a
report that outlines options for a common United Nations (UN) system approach for
environmental and social safeguards. The opportunity to explore options for advancing UN
sustainability was welcomed in response to several requests raised by EMG members in the lead up to the
meeting. The EMG initiative is in the spirit of the 2005 World Summit outcomes on system-wide
coherence and actions to strengthen linkages between the normative and operational work of the UN.

The Safeguards Working Group focal points subsequently decided to change the terminology from
environmental and social safeguards to environmental and social sustainability framework as
the latter encompasses safeguards plus additional measures used in internal management practices
and normative activities. In this way sustainability framework is more inclusive of UN system
activities.

The rationale for this work stems from the understanding that the systematic use of an environmental
and social sustainability framework across UN entities would provide the UN system with an
important opportunity to demonstrate leadership, and enhance accountability for the environmental
and social sustainability of the UN systems policies and practices.

The framework would therefore improve the quality and results of UN supported activities and will
help to identify opportunities to harness greater efficiencies and cost savings. Operational and
technical performance will be measurably enhanced, and upstream (high-level) opportunities to harness
efficiencies, for instance at the level of policy and programme design, will be more informed. Unforeseen
environmental and social impacts and risks (and associated reputational liabilities and costs) can be
avoided, and opportunities to leverage/maximize the positive impacts of policies, programmes/projects
and operational activities can be more consistently harnessed.

An inter-agency review, conducted as part of this consultation, found that the application of
environmental and social sustainability measures by UN organizations is uneven. Several entities
within the UN system are already utilizing environmental and social sustainability measures, such as
safeguards. However, these practices are not consistent or readily comparable.

In the absence of a common framework, UN organizations have adopted myriad ways of
considering social and environmental impacts. A few organizations have developed comprehensive
environmental and social impact assessment procedures. Many use a mix of review committees and staff
expertise to examine environmental and social implications. Overall understanding within individual
organizations about the relevance (and utility) of environmental and social sustainability measures is
highly varied. On one end of the spectrum, some staff members consulted felt that the UN is behind the
curve and needs to catch-up with its sister organizations like the World Bank, while at the same time
setting a precedent for social issues like human rights that are not well covered by others. On the other
end, some staff members felt that environmental and social safeguards were not relevant to their work and
that the adoption of a common approach could be a burden to them. The confusion over the term
safeguards was one of the reasons the approach was re-framed as an environmental and social
sustainability framework that is more flexible and inclusive of UN activities.

The importance of environmental and social safeguards measures was recognized by the senior
officials of the EMG, who initially requested the consultative process on safeguards, and has continued
to support the effort. The UNEP Governing Council at its 26 session in February 2011 also encouraged
the EMG to put in place a process for environmental impact assessment and the use of environmental and
social safeguards in respect of projects taken up directly by the organizations of the United Nations
system.

A framework for environmental and social sustainability across the UN system has been developed
by the safeguards consultative process for consideration. The framework proposes: 1) a common
vision, rationale and objective; 2) individual actions to be taken by each UN entity to internalize
environmental and social sustainability measures; and 3) collective actions for the system to undertake,
such as a support and knowledge sharing function, minimum requirements, and a centralized reporting
structure.

Key benefits of a common sustainability framework fall into the following five categories: capacity-
building for all UN organizations; increased credibility; minimizing risks and maximizing opportunities;
greater simplification and coherence to policies and procedures; enhanced transparency.

There is still a need to 1) raise awareness and support across UN entities for the use of a common
environmental and social sustainability framework; and 2) continue the consultative process to
further explore implementation considerations. To be effective, the adoption of a common framework
requires high-level institutional commitment and support as set out in the statement (subject to approval)
by Executive Heads of Agencies, Funds, Programmes, and Departments of the United Nations on
advancing environmental and social sustainability in the UN system.

Further work is needed to evolve the policy-level framework into an implementation plan and
operational model that can be adapted and used by individual UN entities, including through the EMG
work stream currently handled by the Issue Management Group on Sustainability Management. Some of
the elements that require more consideration and consultation include: weighing options of flexibility and
accountability, common and individual policies and procedures, legal and managerial requirements, and
the use of national systems.

INTRODUCTION

This report responds to the request made by the Senior Officials of the Environment Management Group
(EMG) at their 15 meeting in September 2009, to undertake a consultative process and prepare a report
that explores options for a common UN system approach for environmental and social safeguards, now
called an environmental and social sustainability framework. The opportunity to explore options for
advancing UN sustainability was welcomed in response to several requests raised by EMG members in
the lead up to the meeting. The EMG initiative is in the spirit of the 2005 World Summit outcomes on
system-wide coherence and actions to strengthen linkages between the normative and operational work of
the UN.

The first EMG consultative meeting on environmental and social safeguards was held in June 2010 in
Washington, DC, where further information needs and a roadmap for the consultative process were
agreed. To move the process forward, a Drafting Group (comprised of staff from the EMG Secretariat,
UNDP, UNEP and WFP) was established, which has led the development of this report and sustainability
framework, with the support of a consultant. An EMG website has been established for the consultative
process and provides additional background information.

At their 16th meeting in September 2010, the Senior Officials of the EMG welcomed the progress made
in the consultative process on environmental and social safeguards. The linkage with the ongoing work of
the EMG Issue Management Group on Sustainability Management (which has focused on moving
towards a climate neutral UN) was also acknowledged, and senior officials agreed that the work on
sustainability management was a subset of the broader environmental and social safeguards framework,
specifically as a contribution to the operations/ facilities entry point. It was felt that the Rio+20
Conference in 2012 provides an opportunity to demonstrate how the UN can walk the talk, demonstrate
leadership, and enhance accountability for the ways in which the UN systems policies and practices are
consistent with internationally agreed environmental and social sustainability principles.

Key issues raised at the 16 EMG SOM in September 2010 included:

- There is a need for a structured, cooperative and flexible approach both in terms of application and
timelines to the work on advancing sustainability in the UN system, backed by necessary resources to
support agency/ entity level implementation.

- The need for flexibility in application of approaches and timelines was heavily emphasized, as UN
entities operate in very different contexts, with activities ranging from peacekeeping, development
assistance and lending, to facilitation of normative international cooperation.

- UN entities would tailor minimum standards to the realities of their activities.

- The need for the environmental competence held by EMG members to be complemented by the
necessary social competence in developing sustainability measures.

- Further progress will depend on the ability of participants in the consultative process to actively
contribute to the endeavor and share information on their current environmental and social priorities
and practices.

- The need to account for political sensitivities among member states was also mentioned.

Recognizing the complexity of the issue before them, the Senior Officials requested the continuation of
the consultative process in close cooperation with the Issue Management Group on Sustainability
Management with a view to:

1. Finalize the mapping exercise and gap-analysis and refine the conceptual framework for
environmental and social safeguards; and

2. Prepare options for a coherent UN system-wide (common) environmental and social safeguards
framework including a possible input on Sustainable UN to Rio+20.

The UNEP Governing Council at its 26 session in February 2011 encouraged the EMG to continue
supporting the implementation of the United Nations climate-neutral strategy and advancing the
sustainability of policies, management practices and operations in the United Nations system, including
sustainable procurement, and the establishment of and agreement to put in place a process for
environmental impact assessment and the use of environmental and social safeguards in respect of
projects taken up directly by the organizations of the United Nations system.
In March 2011 the EMG Secretariat hosted in Geneva the second consultative meeting on a system-wide
environmental and social safeguards framework, where the Drafting Group presented findings of an inter-
agency review; a revision of the conceptual framework for environmental and social safeguards; and
explored options for a common UN approach. WHO joined the Drafting Group at this time due to its
recent experience with developing an environmental and social assessment procedure. A key outcome of
this meeting was a proposal to change the terminology from environmental and social safeguards to
environmental and social sustainability framework (which includes safeguards as one of several
possible instruments that can be used) to more accurately reflect the broad approach being taken.

The Drafting Group met again in June 2011 in Rome, with the addition of representatives from: 1)
organizations developing or revising their institutional safeguards: FAO, IFAD, and the World Bank; and
2) the IMG on Sustainability Management, to further coordinate the work of the two EMG initiatives.
Key outcomes of this meeting included:

1. The further development of a broad framework for advancing environmental and social
sustainability in the UN system, which includes safeguards.

2. Greater support for and mutual understanding of the synergies between the work of the IMG on
Sustainability Management and the work of the environmental and social sustainability group
(formerly called the safeguards group), including presenting the work of the two groups under a
single Sustainability Framework.

3. Enhanced awareness of the need for political commitment to move the initiative forward, and for
opportunities in the next year to garner that support.

Progress Report

This report provides a framework for advancing the environmental and social sustainability of the UN
system, supplemented by annexes that reveal in more detail the outcomes of the consultative process.

This report provides:

1) The elements of a common framework for environmental and social sustainability in the UN
system;

2) The context for a common framework, based on international good practice and a stock taking of
precedents and expectations internal and external to the UN;

3) Findings from an inter-agency review and mapping exercise to identify examples of current UN
internal environmental and social sustainability measures, activities, and initiatives;

4) Issues for future exploration in the next phase of developing the framework, which will focus on
implementation;

5) Conclusion and recommendations for next steps;

6) The annexes to the document go a step further, and provide: A) a more detailed explanation of
some of the sustainability framework elements; and B, C, E) a look at how environmental and
social sustainability measures are being applied internally and externally to the UN, including an
in-depth case study of WHO's experience to date.

CHAPTER 1. APPROACH FOR A COMMON ENVIRONMENTAL AND SOCIAL
SUSTAINABILITY FRAMEWORK

In response to requests from the EMG Senior Officials, the Environmental and Social Sustainability
consultative process conducted an inter-agency review and consultative process to explore options for
advancing environmental and social sustainability in the UN system. This chapter describes a revised
framework for the initiative proposed by the group, based on the more inclusive foundation of
environmental and social sustainability rather than environmental and social safeguards, as was
originally envisioned. Given the breadth of activities in the UN system, it was felt that the traditional view
of safeguards (which is commonly applied at the programme/ project level) applies only to the work of
some UN entities, but that improving environmental and social sustainability applies to all.

The underpinnings for a common sustainability framework are derived from the core mission of the UN
system and findings of the inter-agency review of measures and mechanisms being used to integrate
environmental and social objectives into policies/ strategy, programmes/ projects, and facilities/
operations. A detailed account of the review methodology and outcomes can be found in Chapter 3.

The framework - which aims to provide a common approach for the use of environmental and social
sustainability measures - provides a way for the UN system to further fully align how it performs its work
with the environmental and social principles and norms it has pioneered internationally.

1.1 Key Considerations for the Development of a Common Framework

In assessing the review findings, the consultative process took into consideration the issues raised by the
EMG Senior Officials, recommendations from the environmental and social sustainability focal points,
and lessons and experiences shared by review interviewees. Support was given to the development of a
framework that best:

- balances flexibility and accountability

- adds-value to existing procedures and policies

- applies to all types of UN activities

- strengthens monitoring, evaluation, and transparency

- enables the UN to share knowledge in a more systematic manner

- operates in the spirit of the 2005 World Summit outcomes and the Delivering as One initiative

- is aligned with wider (current) sustainable development concerns and issues (e.g. green economy,
climate change, current and post-2015 millennium development goals).

Looking at a continuum of options on how to structure the framework - from least to most prescriptive
the group felt a basic foundation for an environmental and social sustainability framework was first
needed. Choices for specific implementation elements would then evolve through further consideration
and consultation, such as weighing options of flexibility and accountability, common and individual
policies and procedures, legal and managerial requirements, and the use of national systems. As some of
these elements such as accountability and transparency have widespread implications for the UN
system, more research and consultation on these issues is envisioned for the next phase of development of
the sustainability framework.

The following section outlines the key elements for a system-wide environmental and social sustainability
framework.

1.2 Elements of a Common Framework

The proposed environmental and social sustainability framework incorporates the following: 1) a vision,
rationale and objective; 2) enabling conditions for each UN entity to internalize; 3) collective actions to
support, apply, manage, and monitor and evaluate sustainability measures.

A Framework for Advancing the Environmental and Social Sustainability in the UN System

Vision

The environmental and social sustainability of the UN is enhanced, thereby contributing to its mission to
promote and protect human well-being in line with internationally agreed declarations, conventions,
standards and covenants.

Rationale

The UN system has a long history of promoting positive environmental and social outcomes. While
many parts of the organization have individually internalized sustainability goals, the UN acting as One
can do even more.

By developing of a common environmental and social sustainability framework, the UN will strengthen
its leadership role and better support Member States to further the global sustainability agenda at all
levels. Specifically, the framework allows the organization to:

- Lead by example: by enhancing institutional capabilities and credibility through strengthening the
internalization of the environmental and social principles it advocates, thereby contributing more
effectively to the achievement of internationally agreed goals and targets related to sustainability;

- Work safer and smarter: by reducing risks and maximizing benefits through an integrated approach
to informed decision-making;

- Respond more effectively: by better addressing emerging issues and stakeholder needs in a timely
manner, and by being an attractive and trusted implementing partner;

- Leverage knowledge and experience: by improved information sharing and working in a more
efficient, coherent, accountable and transparent manner.

Objective

The UN system enhances its sustainability by internalizing internationally accepted environmental and
social principles at the three entry points of policy/ strategy, programmes/ projects and facilities/
operations through individual and collective approaches that address associated risks and maximize
opportunities.

Expected outcomes

Outputs for individual entities

1. Enabling Conditions

Enabling conditions are strengthened and
established for the internalization of
internationally accepted environmental
and social principles within UN entities.

a) A clear, coherent vision and policy is established that
relates environment and social issues to the mission and
work of the organization.

b) Internal capacities to implement the vision and policy,
and raise awareness among staff to ensure environmental
and social sustainability is embraced.

c) Adequate resources are available to achieve the
institutional goals of the vision and policy.

d) A continuous cycle of improvement by reviewing the
effectiveness of outcomes and activities in order to enhance
the organization?s environmental and social performance.

2. Implementation entry-points

Environmental and social considerations are systematically integrated into service delivery mechanisms
to achieve desired results, using the following three management entry-points to encompass the work of
the UN system:

Policy / Strategy

UN system supports the development of
policies and strategies that embed a
broad view of sustainability and avoid
unnecessary trade-offs or harm to people
and the environment.

a) A process for integrating environmental and social
sustainability considerations into relevant policies and
strategies is implemented, for example through conducting
or supporting strategic level assessment.

Programmes / Projects

Environmental and social considerations
are systematically integrated in all
programme and project cycles including,
for example, through the use of
environmental and social assessment.

a) An environmental and social assessment framework
(including safeguards) is developed and implemented that
includes screening, review, management plans, monitoring,
accountability and transparency.

b) The consideration of environmental and social
performance objectives is integrated into existing
management approaches, such as partnerships and networks.

Facilities / Operations

Procedures and practices for integrating
environmental and social considerations
into management practices and support
systems for operations, premises, travel,
procurement, and use of information
technology which contributes to
sustainable development.

a) A sustainability management system is established which
encompasses measures for moving the UN entity towards
climate neutrality.

b) Sustainable practices in building management,
procurement and information and communication
technologies are developed.

c) Sustainable practices to address areas not covered by the
Sustainability Management strategy, such as social aspects
of facilities and operations management, are developed.

Collective Actions

1. Demonstrate system-wide commitment for the advancement of environmental and social
sustainability of the UN system through support for a common approach to the use of
environmental and social sustainability measures as outlined in the proposed framework.

2. Adopt minimum requirements for the internalization of environmental and social sustainability
measures across the three entry-points.

3. Keep the advancement of the use of environmental and social sustainability measures under
review and continue the sharing of knowledge and lessons learned among UN entities to
strengthen coherence and leverage efficiencies.

4. Consider the need for a support and knowledge sharing function to assist UN organizations to:
1) internalize enhancement of their environmental and social sustainability measures, 2) build
capacity and share learning; 3) centralize accountability, reporting and evaluation.

A more detailed examination of framework elements and considerations can be found in Annex A.

1.3 Phased Approach

The three-entry points of a common environmental and social sustainability framework presents the UN
system with a holistic approach that provides a continuum from policy development to program and
project management to facility and operations considerations. While such an approach ensures greater
awareness of potential social and environmental impacts and opportunities, it was also noted to be an
exceptionally large endeavor to undertake all at once, given the breadth of UN activities across the
system. It was also noted during the inter-agency consultative process that no other institution addresses
sustainability measures across all of the entry-points proposed under one sustainability framework. In
order to retain the benefits of a holistic and integrated framework, an incremental approach is advised.

Therefore, subsequent to system-wide commitment to a common framework for environmental and social
sustainability, ongoing work will be required both collectively as well as by individual entities (as
described in the framework above) and will be an iterative process that continues to evolve from
experience. In particular, due to the variability in mandates and existing sustainability measures being
applied across the UN system, each UN entity will initiate the process of implementation from differing
starting points which will require a flexible and phased approach. This phasing will vary by entity
dependent on where gaps are identified and priorities exist. Because there are many UN organizations
that are already implementing sustainability measures, these organizations will be initially engaged to
identify opportunities to pilot the framework to garner lessons learned relatively quickly for the benefit of
the larger system.

Environmental and social assessment was identified as a particular need/ gap by many organizations
during the safeguards review of the UN system. Hence the phased approach is envisioned to begin with
the frameworks programme/ project entry point for UN activities, in great part because projects and
programmes are generally recognized as having potential environmental or social implications. Phasing of
the facilities/ operations entry point will be coordinated with the IMG on Sustainability Management
(IMG SM), which has already addressed a number of the facilities/ operations issues. However, there are
some elements of that entry point that will not be covered by the IMG SMs work, such as social issues
like labor. In addition to phasing by entry point, phasing by UN entity is also suggested. This approach
starts with the UN organizations most prepared to implement the sustainability framework, thereby
providing access to piloting and lessons learned for others. It then progresses from UN entities most to
least likely to have some form of environmental and social risk associated with their work.

CHAPTER 2. CONTEXT FOR A SYSTEM-WIDE ENVIRONMENTAL AND SOCIAL
SUSTAINABILITY FRAMEWORK

2.1 Examples of Environmental and Social Risks and Opportunities

The proposed environmental and social sustainability framework provides an approach for the
management of a wide variety of environmental and social impacts and risks, for the identification of
benefit enhancement opportunities, and can reveal trade-offs that need to be considered. It is also
important to note that environmental and social sustainability not only looks at the potential impacts
resulting from an activity but also environmental and social risks to the activity.

o Access to basic health, clean water, water resources, energy, education, housing, employment,
land rights and other rights (such as political association, information and justice)

o Exposure to pollution of air, land, water, and to consequences of climate change

o Absence of involuntary displacement of individuals, groups or communities, and disruption of
livelihoods

o Access to safe and decent working conditions

o Absence of use of forced or child labor

In all of the above, there are special concerns for the protection of vulnerable groups including: children,
women and girls, the elderly, indigenous peoples, disabled people, people at risk of, or affected by, HIV.

2.2 Internal Developments and Expectations of Environmental and Social Sustainability

At the first consultative workshop to consider a systemGwide framework for environmental and social
safeguards (June 2010), participants recommended the following basic framework for moving forward:

o Operate in the spirit of the 2005 World Summit outcomes and the Delivering as One initiative;

o Provide a coherent, focused set of principles and minimum expectations for UN-supported initiatives,
with enough flexibility to fit respective operational challenges;

o Strengthen organizational incentives to develop skills and expertise for advancing environmental and
social sustainability;

o Provide a common reference point and language for UN staff and for country partners and thereby
reduce the number and complexity of different agency procedures at country level;

o Strengthen monitoring and evaluation processes, and enable the system to share knowledge, learn
together, and improve in a more systematic manner; and

o Demonstrate to donors and other stakeholders that the UN has a credible, transparent and coherent
approach, built on international good practices, and improve the ability of the UN to deliver resources
to countries.

Following on those recommendations, a key purpose of the environmental and social sustainability
review of the UN system was to determine how different organizations could bring their existing practices
into one consolidated framework to more consistently and comprehensively address the environmental
and social impacts of their work. Review results demonstrated that there are strong underpinnings in the
UN system for a coordinated effort in this area.

Growing recognition of the value of environmental and social sustainability is reflected in the many ways
UN organizations have:

a) Developed policies and tools to assess the social and environmental impact and risks of their
work, and

b) Developed policies and initiatives to strengthen sustainable practices and measure results.

A common framework for environmental and social sustainability thus provides a mechanism to further
strengthen the ability of individual organizations to achieve sustained results, identify opportunities, and
ensure unintended adverse impacts and risks are avoided or minimized.

The protection and enhancement of human well-being is a common denominator for the UN system and
the ultimate goal of sustainability practices. The Declaration of Human Rights, the United Nations
Charter, international labor conventions, multilateral environmental agreements, the Law of the Sea, and
other international agreements such as the Millennium Declaration and the Millennium Development
Goals, the Rio Declaration and the Beijing Platform for Action all build on the protection and
enhancement of human well-being.

Taking a leadership role in the implementation of environmental and social sustainability measures is
explicit in the normative framework for the UNs work, from the Universal Declaration on Human
Rights, through major summits and conferences, to highly technical standards in legal instruments such as
human rights and multi-lateral environmental treaties (MEAs). For example, the Convention on
Biological Diversity is a normative environmental instrument that provides important social safeguards
related to access to information and remedy, protection of indigenous peoples and other vulnerable
groups, and benefit sharing.

The use of a system-wide environmental and social sustainability framework can help to enhance
transparency and accountability, and strengthens harmonization in the design of initiatives. It also furthers
the UN system response to the Paris Declaration and Accra Agenda for Action, and the 2008 Doha
Declaration on Financing for Development as it supports national ownership and use of national systems.

2.3 External Developments and Expectations of Environmental and Social Sustainability

The use of environmental and social sustainability measures, such as safeguards, have become common
practice, hence there are many models from which to learn and assess which approach is best for the UN.
Additionally, because donors, partners and other stakeholders are often requiring the application of such
measures in their partnerships, the common approach adopted by the UN would need to be flexible
enough to accommodate requirements from these various partners (e.g. the potential to apply country
systems or partner requirements when consistent with UN policy). As the UN system continues to
advocate for more joint programming and Delivering as One, it will need to continue to harmonize its
policies, such as environmental and social sustainability, or risk an inability to progress in these areas.

The following outlines the key sustainability-related developments among UN partners and stakeholders:

Government partners: Emerging legislation on environmental and social assessments is becoming
international good practice in both developed and developing countries.

Donors (bilateral and multilateral): An increasing number of donors are asking for partners and
recipients to have safeguards in place, such as the US asking for equivalency to its National
Environmental Policy Act (NEPA). In May 2011 the Global Environmental Facility (GEF) Governing
Council approved a provisional policy on environmental and social safeguard standards that will apply to
all its implementing agencies, including a number of UN organizations. This will require that all
implementing agencies have environmental and social safeguard policies in place for projects.

As more donors ask implementing partners to have safeguards in place, there is concern that without such
a system the UN will not be competitive for such projects. This concern runs particularly high in the
climate change area, as $30 billion has already been pledged over the next few years to combat climate
change, with $100 billion per year pledged after 2020.

NGOs: In addition to often having their own environmental and social sustainability systems in place,
NGOs and civil society will continue to be a vocal watchdog in how activities affecting the environment
and people are designed and implemented. Participation from civil society is a key element in many
sustainability systems and is becoming an expected norm, along with access to public grievance
mechanisms. For example, the indigenous community responded proactively to the GEFs announcement
to require environmental and social safeguards of all existing and future implementing partners, but
offered their own guidelines on how their interest could best be considered. Whether or not the
indigenous communitys guidelines are used, it illustrates the level of engagement from NGOs and
affected populations on such issues.

Private sector: Companies that become members of the UN Global Compact currently over 5,300
businesses in 130 countries commit to aligning their operations and strategies with ten universally
accepted principles in the areas of human rights, labor, environment and anti-corruption that have all
been developed within the framework of the UN. Similarly, the international investment community
developed six Principles for Responsible Investment for the United Nations-backed Principles for
Responsible Investment Initiative. They reflect the view that environmental, social and corporate
governance (ESG) issues can affect the sustainability of investment portfolios and therefore must be given
appropriate consideration by investors if they are to fulfill their duty. Further, sixty-five financial
institutions from around the globe have adopted the Equator Principles, a voluntary set of standards for
determining, assessing and managing social and environmental risk in project financing.

The private sector is also beginning to look at social criteria by assessing social sustainability in areas
such as human rights, environment and labor conditions by using ISO 26000, international guidance on
social responsibility. Additionally, social labeling for products is being developed - building on
existing environmental labeling like Blue Angel and the EU Ecolabel in Europe and Energy Star in the
US.

CHAPTER 3. KEY FINDINGS FROM THE INTER-AGENCY REVIEW ON
ENVIRONMENTAL AND SOCIAL SUSTAINABILITY

3.1 Review Methodology

The EMG Drafting Group for Environmental and Social Safeguards carried out a review in late 2010 to
identify how UN entities address the environmental and social impact of their work. To date, the review
has gathered information from a wide variety of UN sources to learn from each others efforts, understand
where the UN system can work together, and determine ways to overcome institutional constraints to
better environmental and social performance.

A baseline framework was developed for the review to examine how safeguards are applied at three key
entry points within an organizations work: 1) policy / strategy, 2) programmes / projects, and 3)
operations / facilities. The baseline framework was subsequently revised and refined to better encompass
the variety of UN entities and to consider implementation elements. The framework is presented in
Chapter 1.

The methodology for an inter-agency review was originally conceived as a gap analysis. However it
became apparent that environmental and social sustainability measures within the UN were so disparate
and often not viewed as sustainability systems or safeguards that it was not possible to develop a
baseline on which to predicate a gap analysis. Additionally, confusion over what safeguards
encompassed traditionally they are applied only to the project level was one of the reasons the
terminology was changed to sustainability framework, which is viewed as more flexible and inclusive
of various UN activities. In light of moving away from a gap-analysis, more emphasis was placed on
narrative data collection from primary source interviews, and analysis of UN environmental and social
sustainability measures in the many forms in which they exist. This data was used to discern where there
are commonalities in the UN system and how the organization could create a common approach.

Given the breadth of the UN system, it was not possible to do a complete survey of sustainability systems
in use in the time given. This review therefore provides a snapshot of UN sustainability systems at the
end of 2010 and is not an exhaustive analysis of what each UN agency, fund, programme, and department
has achieved in this area. Due to the cross-cutting nature of how environmental and social sustainability is
addressed, the entry points to discuss this issue with each UN entity have at times required interviewing
as many as five staff members from one organization and even then only a partial picture emerged of
how such considerations are incorporated into an organizations work.

3.2 Application of Environmental and Social Sustainability Measures across the Three Entry
Points

The review sought to understand how environmental and social sustainability measures were applied and
viewed in each of the entry points outlined in the proposed sustainability framework. As data is not
available for all UN organizations, conclusions are subject the current findings. A brief overview of some
of the more defined practices used by UN entities can be found in Annex B.

Policy / Strategy Management: This entry point found a moderate variety of activities, in great part
because many interventions in this category either do not require environmental and social assessment or
would require a minimal approach. UN organizations focused on normative work, such as the
Conventions, had some of the most significant environmental and social assessment activities in this
category. Examples of existing procedures include: policies on a human rights-based approach, gender
equality and gender mainstreaming; advisory missions; UNDG Environmental Sustainability and Climate
Change Guidance for UNDAF/CCA; UNDP Environmental Mainstreaming Framework; Ramsar
Wetlands Inventory and Strategic Assessment; among others. It is anticipated that a deeper understanding
of other inter-agency approaches, like the UNDG guidance, will inform the further development of a
system-wide sustainability framework so as to build on lessons learned and good practice.

Programme/ Project Management: This entry point, traditionally the area where safeguard practices are
applied, found a significant variety of environmental and social sustainability procedures in use, in great
part because projects and programmes are generally recognized as having potential environmental or
social implications. The review of existing UN practices found a strong consistency in the application of
screening and assessment processes at this entry point, which supports the case for establishing a set of
minimum requirements for the framework. Examples of procedures in place include: Environmental and
Social Impact Assessment; Environmental Risk Identification; Guidelines for field projects (including
screening, scoping, and management for environmental and social aspects); committees for specific
thematic issues, like gender; intraGdivisional project review groups that use a mix of economic, social and
environmental criteria; Environmental Review in the Programme Cycle; Rapid Environmental Impact
Assessment in Disaster Response; Valuation of Natural Assets; Vulnerability Assessments; among others.

Facilities/ Operations Management: This entry point found a small and fairly cohesive variety of
procedures in use, particularly in the area of facilities management. A number of entities were in the
process of developing procedures in this area, such as risk management systems or sustainability
initiatives. An early assumption might be drawn that this category has seen a number of recent procedures
put in place particularly environmental procedures because of system-wide efforts such as the IMG on
Sustainability Management, Sustainable UN, a system-wide procurement portal (Global Marketplace),
and heightened awareness of green building benefits. Examples of procedures in place include: safety
audits; field mission management procedures; a framework for assessing, monitoring and evaluating the
environment in refugee-related operations; guidance on including environmental considerations into
logistics, meetings and offices; among others.

3.3 Where We Are Today

In sum, the review found an ad-hoc approach, varied understanding of the purpose and benefits of
applying environmental and social sustainability measures, varied expectations of what it could deliver,
and a desire by a number of entities to have the guidance and tools to develop measures that would be
relevant and appropriate for their organization.

Ad-hoc approach: Without an over-arching framework to work within, UN organizations have adopted
myriad ways of considering social and environmental impacts. The review found that a few
organizations have developed comprehensive and integrated approaches to the management of
environmental and social sustainability concerns. Many use a mix of review committees and staff
expertise to examine environmental and social implications. Some sustainability measures respond to
existing agreements within the UN system, such as mainstreaming a gender perspective into all policies
and programmes coming out of the Beijing conference, or considerations for HIV/AIDS, coming out of
the UN Security Council Resolution 1308, and gender, coming from Security Council Resolutions 1325
and 1889. A few UN entities contacted felt they could not participate in the review because it was not
clear to them how environmental and social safeguards/ sustainability measures would apply to their
work.

This ad-hoc approach produces uneven polices with varying levels of information being generated, which
are difficult to coordinate with internal UN or external partners. It can also mean risks may be caught by
luck as much as design.

Varied expectations: The review found that UN staff members have highly varied expectations from their
respective institutions on environmental and social sustainability. On one end of the spectrum, some staff
feel that the UN is behind the curve and needs to catch-up with its sister organizations like the World
Bank, while at the same time setting a precedent for social issues like human rights that are not well
covered by others. On the other end, some staff members felt that environmental and social safeguards
were not relevant to their work and that the adoption of a common approach could be a burden to them.
The confusion over the term safeguards was one of the reasons the approach was re-framed as a more
inclusive environmental and social sustainability framework.

Need for a common framework: Findings from the review support the need for an environmental and
social sustainability framework that works across the various mandates and activities of the UN system,
but also underlines the need for flexibility. It was felt that a common framework would build confidence
through cooperation, shared resources and information, and make the implementation of a sustainability
system easier and more efficient for each agency.

A Snapshot View: Who Uses Environmental and Social Sustainability Measures?

Following is a brief overview of UN and non-UN entities that apply environmental and social
sustainability measures. A more detailed list and description can be found in Annex B.

In the 1980s, the World Bank was the first major development institution to initiate social and
environmental safeguards. The International Finance Corporation (IFC) followed by adopting its
Environmental and Social Safeguard Policies and its Disclosure Policy in 1998. In 2006, the IFC adopted
a set of Sustainability Standards. Multilateral development banks developed their own safeguards,
largely variations on those of the IFC and World Bank. The World Bank is currently revising its
safeguards based on a review carried out in 2010.
Additionally, member states have their own national environmental and social policies and systems in
place (e.g. legal frameworks for EIA and SEA). In 2005 countries (both developing and developed) along
with multilateral and bilateral organizations committed to harmonizing approaches to environmental
assessment as part of the Paris Declaration on Aid Effectiveness and subsequently committed to use
national systems (including for environmental and social assessment) to the maximum extent possible in
the 2008 Accra Agenda for Action.

Environmental and social sustainability systems come in many shapes in the UN system and nearly every
UN entity interviewed has some form of impact assessment in place functioning as an impact or risk
assessment measure. For example: IFAD has had procedures for Environmental Assessment since 1994
and updated its Environmental and Social Assessment Procedures in 2009; WFP has integrated social and
environmental sustainability in its work at the policy, project management and operational levels; FAO
employs Environmental Impact Assessment procedures to ensure that its field operations are consistent
with its sixteen governing principles; the United Nations Development Group (UNDG) issued a
Guidance Note on Mainstreaming Environmental Sustainability in Country Analysis and the UN
Development Assistance Frameworkin 2009; and DPKO/DFS issued their Environmental Policy for
UN Field Missions in 2009 and also employs social policies in Child Protection, Gender and HIV. The
MDG Carbon Facility (UNDP) has developed, and the UN-REDD Programme (FAO, UNDP, UNEP) is
developing, integrated social and environmental safeguards for their work.

Since 2000 the UN Global Compact has asked companies to embrace, support and enact a set of value-
based principles. In turn, companies being members of the Global Compact has in most cases become a
minimum requirement in the UN system for engagement with the private sector. In the private sector
there are also examples of environmental and social sustainability systems in the context of risk
management and corporate social responsibility. Financial institutions took the lead in the private sector
in 2003 with the establishment of the Equator Principles.

3.4 Benefits Associated with the Use of a Common Environmental and Social Sustainability
Framework

Interviewees and a document review identified that a common framework for the use of environmental
and social sustainability measures in the UN system could provide the following related benefits:

Capacity building:

- Help UN agencies, funds, programs, and departments, and their implementing partners and
beneficiaries, to take advantage of environmental and social opportunities, identify and manage
risks, and avoid or mitigate negative impacts and costly delays and corrections at implementation
stage.

- Provide a set of minimum requirements for institutional sustainability for UN-supported
initiatives. This would make a very tangible contribution towards operationalizing a range of
normative priorities and frameworks such as human rights treaties and multi-lateral
environmental agreements.

- Provide a framework to facilitate shared learning across the UN system.

- Encourage greater engagement with, and capacity development of, country partners, such as the
Ministries of Environment, Social Affairs, Planning and Development.
Credibility:

- Show that the UN is living up to the principles it developed and advocates for.

- Demonstrate to donors that the UN has a credible, coherent approach, built on international best
practice and standards, and improves the ability of the UN to access Multi-Donor Trust Funds.

- Provide countries and stakeholders with practical guidance that reflects UN best practice.

- Provide a coherent platform for greater leadership by the principles of UN organizations and
more consistent communication with stakeholders about the importance of environmental and
social sustainability.

- Ensure that interventions and activities take a more holistic approach to sustainability. For
example, many donors are upgrading their environmental procedures to address climate risk,
which has resulted in a more inclusive view of programming.

Reduce risks and maximize benefits:

- Work safer and smarter through an integrated approach and more informed decision-making.

- Be able to better understand and weigh environmental and social trade-offs and identify
opportunites.

Simplification and coherence:

- Harmonize reporting procedures and allow the UN system to report coherently on how well UN
supported initiatives prevent harm to people and their environments and help further human well-
being.

- Provide an opportunity to agree, as a system, on particular themes and cross-cutting issues (such
as indigenous peoples) for environmental and social sustainability, and to address these
systematically at the earliest stages of any activity or intervention.

- Improve the coherence of sustainability measures and mainstream them into common UN
programming and operations procedures, thereby reducing the number and complexity of
different, sometimes competing, agency procedures at country level and helping to reduce
transaction costs for country partners and increase transparency.

- Strengthen harmonization and the Delivering as One approach, currently being piloted in eight
countries.

- Clarify and streamline the current mix of UN accountability measures, particularly in relation to
national laws and procedures.

Transparency:

- Enhance transparency and accountability by providing a platform for the participation of national
and local stakeholders in the design of initiatives; and giving order and consistency for
organizations to address environmental and social concerns through the allocation of resources,
assignment of responsibility and ongoing evaluation of practices, procedures and processes.

- Strengthen monitoring and evaluation processes, and enable the system to share knowledge and
apply lessons in a more systematic manner.

- Provide a clear basis for open assessment and recourse/ arbitration.

3.5 The Opportunity Costs of not Developing a Common Framework for Environmental and
Social Sustainability

-
A few interviewees raised the issue of what opportunities would be lost by not developing a common
environmental and social sustainability framework. This perspective was also evident in some of the
background documentation used in the review, such as the 2010 review of World Bank Group safeguards.

Some of the possible opportunity costs to not having common framework for the UN system include the
lack of ability to:

3.6 Synergies between the Framework for Environmental and Social Sustainability and
ongoing Work led by the Issues Management Group on Sustainability Management

At their 16 meeting, EMG Senior Officials noted that the work on climate neutrality and (environmental)
sustainability management in the UN represents a subset of the issue discussed in considering a common
environmental and social safeguards, and that this subset is complemented by other sustainability aspects
such as those related to internal UN policies and operations. The consultative process on the
environmental and social safeguards/ sustainability was requested to be undertaken in close cooperation
with the Issue Management Group on Sustainability Management (IMG SM).

The EMG Senior Officials meeting in September 2010 welcomed the progress made by the time-bound
IMG SM and the recent attention given to this issue by the Joint Inspection Unit in its report
Environmental Profile of the United Nations System Organizations. Given the ongoing nature of the
work of the IMG the meeting decided to extend its time-period until the end of 2012. In view of the need
to anchor sustainability management in intergovernmental processes and in the internal management and
operational structures of the UN system, the meeting requested the IMG to prepare a strategic plan for
sustainability management in the UN system by September 2011. This will focus on sustainability at the
facilities and operations entry point of the overarching framework proposed in this report.

Therefore, within a wider sustainability framework for the UN system, the work of the IMG SM covers,
in great part, the entry point for internal facilities and operations management. The consultative process
on the environmental and social sustainability framework has thus identified the need to also develop
sustainability measures for the more outward-looking policy/ strategy and programme/ project
management entry points. There may also be an opportunity to share aspects of a common support
facility, given that both initiatives propose system-wide elements such as capacity-building, reporting,
and evaluation.

CHAPTER 4. FUTURE CONSIDERATIONS FOR A COMMON ENVIRONMENTAL AND
SOCIAL SUSTAINABILITY FRAMEWORK

The following are implementation elements of the framework for environmental and social sustainability
that have been raised in consultation and research, but still require greater consideration to determine the
best actions. It is envisioned that the next phase of work will elaborate on these implementation issues.

4.1 Roadmap for Agency Implementation

The framework elaborated in Section 1.2 of this report identifies a common environmental and social
sustainability vision and objective as well as entity-specific outcomes and outputs. Therefore, it will be
up to each UN-entity to apply the framework within the context of their own organization and identify the
most appropriate measures and implementation plan for moving it forward. For example, those with little
environmental and social impact assessment expertise will require a more robust support and training
mechanism. A common starting point for all UN entities will be to do a simple assessment to determine
which areas of the sustainability framework are already covered by their own policies and procedures, and
which areas not.

This section outlines a basic roadmap, or key activities, to guide each organization through this process.
(A more detailed roadmap would be developed in the next phase of work). This will be used to indicate
where each UN-entity is in the process of implementing sustainability measures. It is estimated that full
implementation will be highly variable and could take between two and five years.

The following activities will need to be conducted by each UN organization to implement environmental
and social sustainability measures, such as safeguards. A system-wide support mechanism would be
available to assist each UN entity in its implementation of the sustainability framework.

1. Identify leadership: Each UN entity would have to make a corporate decision to implement
sustainability practices, and these individuals would be responsible for ensuring the process.

2. Endeavor to find the necessary resources: A budget should not be viewed as a one-time setting
aside of funds, but rather it should be linked to the implementation plan to capture what it fully
costs.

3. Perform organizational assessment / gap analysis: Determine if minimum requirements are
already in place; if not, what exists and what still needs to be done to fill that gap. Assess capacity
needs for organizational assessment, such as resource needs, staff, and training.

4. Develop a roll-out and implementation plan: It is important that each UN entity have its own
vision, objectives, and targets for what it means to advance environmental and social
sustainability. Each entity may also choose to take a phased approach to roll-out (e.g. through
piloting or a scaling up process).

6. Develop a communications plan: Develop a plan to communicate activities and progress to staff
members, to ensure a sense of moving forward and understanding of the value of the process.

7. Build capacity for organizational learning: Develop a plan to capture and share knowledge and
lessons learned for internal and system-wide use.

8. Documentation/ reporting process: An internal review mechanisms is needed, paired with a
common reporting and accountability system.

4.2 Elements of Costing for Implementation

At this time the cost to each UN entity to implement environmental and social sustainability measures is
not known but will be highly variable. However, implementation of a common framework will facilitate
further sharing among agencies of costing issues and resource needs. For example, a few UN
organizations are at the early stages of testing their environmental and social assessment systems (one
component of the framework), potentially generating examples of costs in 6-12 months that UN entities
will wish to consider.

To begin to consider costing, elements described in the roadmap in Section 4.1 (e.g. communications
plan, action plan, reporting) are examples of activities that would all need to be fully resourced. It is
important to note that at the project level, costs associated with assessing and managing potential
environmental and social impacts will also be highly variable and costs for management measures would
need to be built into project budgets. Costs related to environmental and social screening at the
programme/ project level occur before project implementation, so each UN entity will specifically need to
look at how funding can be provided to do this.

4.3 Legal and Managerial Considerations

It is recognized that elements of the environmental and social sustainability framework will require
guidance and ultimately approval across the legal bodies of the UN system. These issues include, but are
not limited to:

1. What are the legal and managerial processes and obligations to establish a system-wide
framework? How can that be coordinated across different UN system legal requirements?

2. How best to determine the UNs sphere of responsibility where accountability begins and ends?

3. How would a potential common accountability and grievance mechanism work across the
system?

4. How best to conduct a common sustainability review for the UN system?

5. In the short-term the environmental and social sustainability group will continue its consultative
process under the EMG. However, the development and implementation of a common
sustainability framework benefits the entire UN system and will in the future need dedicated
funding for a small staff and a support and knowledge sharing function.

4.4 Additional Considerations

Review interviewees raised a number of challenges they felt the UN system faced in operationalizing a
common framework for environmental and social sustainability. These challenges generally fall into six
broad areas, noted below. However some interviewees also offered lessons from their experiences that
could be options for addressing these challenges. In addition, some of the options presented here were
drawn from a review of UN and related institutions reports and documentation.

1. Need to engage political will and leadership for moving a common sustainability framework
forward. Currently, there is no uniform agreement or mandates for UN entities to adopt a
environmental and social sustainability framework. A coordinated effort to develop and foster
alignment with a common framework will require high-level endorsement by the principles of all
participating entities, and engagement with their governing bodies.
Options:

- Develop an agreed statement of support. Build support around a clear and concise statement of
commitment for the development of a common environmental and social sustainability
framework. This statement is viewed as key to the engagement of engaging political leadership
needed to support further work on this initiative. A proposed statement of support is on page 4 of
this report.

- Show benefits and assure transparency. Initially, an environmental and social sustainability pilot
project is recommended to gain knowledge, lessons and models to apply to the wider system.
Success of the pilot will generate support for the process. Then, regular monitoring and reporting
will allow the UN system to benchmark progress and effectiveness of the sustainability system to
show tangible results. Assessment tools like impact assessments and environmental audits will
also provide data from which to determine outcomes and provide transparency.

2. A new framework is too much to implement: How can a common environmental and social
sustainability framework be integrated into a UN system that already has so many policies,
guidelines, frameworks, and modes of operation to learn and follow?
Options:

- Build on what already works. Where possible, a common approach should be based on practices
already agreed upon and used within the UN system. It is recommended that environmental and
social sustainability procedures integrate with existing policies and guidance where possible, and
make redundant other policies. Hence it is not another layer but rather creates cohesion and fills
environmental and social sustainability gaps.

- Focus on commonalities not differences. UN activities can be broken down into three basic
management levels. Choosing modalities rather than themes helps limit the number of different
sustainability approaches needed. Within each entry point the environmental and social
sustainability measures that are most relevant will be determined based on the degree of UN
influence over the activity and the scope and type of activity.

3. System-wide adoption. With such a broad system of disparate activities, how wouldGimplementation
be ensured?
Options:

- Provide support, guidance and capacity-building activities: Understanding that new policies and
practices require time to be fully understood and adopted, a number of support mechanisms and
guidance material for UN entities are envisioned. A centralized mechanism for support will be
needed to provide guidance and capacity-building to UN entities internalizing environmental and
social sustainability measures, such as for training, monitoring and reporting.

- Common reporting system. A common reporting system allows for monitoring and evaluation of
the impact of sustainability measures put in place across the UN system. Providing support and
building capacity for each organizations reporting is seen as integral to enable the common
reporting framework to be effective.

4. National systems: In the spirit of the Paris Declaration, a common framework would provide
flexibility to utilize and develop capacities of national systems and standards to implement the
UN environmental and social sustainability framework.
Options will be further investigated in the next phase.

5. Equivalent social and environmental expertise: Options will be identified to ensure
comparable social expertise is found to complement the environmental competence held by EMG
members.

Options will be further investigated in the next phase.

6. Terminology: While the IMG SM and the consultative process are now working together to
ensure synergies and linkages, the terminology remains confusing, such as between the IMG
SM's sustainability management strategy and the consultation on safeguards environmental
and social sustainability framework.

CONCLUSION

The findings of the inter-agency review and consultations make a strong case for the further development
of a framework for advancing environmental and social sustainability in the UN system. This report
proposes an outline for further development of such a framework, which has been supported by inter-
agency focal points. However, a number of considerations and issues require further exploration before
the next step, a more detailed strategy for internalizing sustainability measures, can be fully realized.

Recommendations for the Way Forward

The work on advancing a common environmental and social sustainability framework has two elements:

1. A system-wide commitment of support for a common approach to the use/application of
environmental and social sustainability measures, and

2. Support for agency-level implementation

The consultative process has compiled compelling data and a developed a proposed framework to move
forward on both phases in the coming year, starting with ensuring system-wide support for a common
approach.

Recommendation 1:

A system-wide commitment of support is critical for the further advancement of the environmental and
social sustainability framework. While a joint statement of support is envisioned as the first step, the
consultative process has also identified other potential opportunities for raising awareness and support for
the initiative. The following are recommended next steps:

1. Agree on a joint statement of by Heads of UN agencies, funds, programmes and departments

2. Bring the environmental and social sustainability framework forward spearheaded by the
Secretary-General

3. Include the environmental and social sustainability framework as a UN initiative to be launched
at Rio+20 in June 2012.

Recommendation 2:

There is a need to continue the consultative process for another year to:

1. Develop a fully integrated implementation model for each agency to adopt;

2. Prepare the initiative for presentation at Rio+20 in 2012;

3. Further develop a Community of Good Practice or Resource Centre to share knowledge and
lessons learned;

4. Further coordination with the IMG on Sustainability Management to ensure synergies;

5. Explore options for issues under consideration, such as a common support and knowledge sharing
function; accountability; and identification of ways to go beyond managing risks and benefits and
also do good;

6. Ensure a source of comparable social expertise is found to complement the environmental
competence held by EMG members;

7. Allow for wider consultation.

ANNEX A: Minimum Requirements
for a System-wide Environmental and Social Sustainability Framework

The following is a discussion of minimum requirements envisioned to date for a system-wide
1environmental and social sustainability framework. It is expected that the elements discussed here may
continue to evolve as more information is gained from the pilot activities of sustainability measures being
undertaken by a few UN entities.

Entry Point Definitions and Typical Minimum Procedures

Policy/ strategy: This category is about strategic thinking and planning and how environmental and social
issues could be considered at a high level. Policy/ strategy interventions will have the lightest approach of
the three categories, but in many cases will still be required to assess the environmental and social impact
of the actions being recommended. Procedures in this area are often referred to as mainstreaming
environmental and social issues into agreements, standards and norms. Examples are strategic initiatives
under the United Nations Development Assistance Framework (UNDAF), UN entities support to
national policy development, assistance to international conventions and treaties, and the work of the UN
Secretariat in regards to policy setting.

A specific minimum requirement for this entry-point will need to be defined and developed and would be
drawn from established management tools and good practice. However, typical approaches include
strategic environmental and social assessments and environmental and social mainstreaming approaches.
If risks are identified through an initial process, further assessments would be required as the policy/
strategy intervention evolves.

Project/ programme: This category applies to the management of field projects and programmes over
which the UN has significant organizational influence. It is the entry point where traditional safeguard
procedures are most likely to apply. In practice, many of those procedures already exist and are being
used in parts of the UN system. Which to use will be based on the extent of the possible impact of the
project. In some cases, sustainability measures or safeguards are already required in the project/
programme area. For example, GEF Partner Agencies are required to meet environmental and social
safeguards criteria being established by GEF in 2011, and some countries have mandatory national
environmental and social assessment processes.

A specific minimum requirement for this entry-point will need to be defined and developed. However,
the basic components of such a procedure will include an environmental and social screening,
assessment and management plan. The initial screening will determine if there are risks and impacts
that require further action or assessment.

Facility/operations: This category applies to the management of UN facilities and operations over which
the UN has significant organizational influence. Facility/ operations management applies to buildings,
emissions reduction, fiduciary management, human resources, ICT, meetings, procurement, travel, and
vehicles, among other areas. Procedures in this category often refer to internalizing sustainable
development practices, such as sustainability management systems, sustainable procurement, and climate
neutrality. Much is already being done in this area, mainly through the IMG on Sustainability
Management, such as advancements in energy efficiency, green building practices, socially responsible
financial investment, and the Sustainable United Nations (SUN) initiative Greening the Blue.

Minimum Requirements

Given that the proposed phased approach in Chapter 1 begins with programme/ project management, the
focus to date has been on developing a list of minimum requirements for this entry point. As there is well-
established practice in applying environmental and social assessment and safeguards at the programme/
project management level, the identification of standard measures to be applied for this entry point is
based on good practice.

Programme/ Project Management
The first two activities would be considered common policy for all programmes/ projects:

1. Screening and categorization (form of categorization to be determined)

2. Assess impact when applicable (environmental and social impact assessments are commonly
used)

Each UN entity would require a policy on when the following was or was not needed, based on the
outcome of the above:

3. Action Plan to address impact

4. Participation and stakeholder engagement

5. Legal /Covenants

6. Disclosure

7. Grievance

8. Monitoring and reporting accountability framework

9. Sustainability (environmental and social performance) evaluation

For environmental and social sustainability measures to be credible, the process needs to be transparent.
Hence issues of disclosure, grievance, and environmental and social performance evaluation are raised.
The consultative process on safeguards cannot, at this time, define the policies around these mechanisms,
but wishes to raise the issue of their importance for the sustainability approach to be viewed as legitimate.

The following are the minimum requirements proposed for each UN entity for a common
sustainability approach.

- Reviewing and categorizing: Programmes/projects shall be reviewed and categorized according to
their potential impacts, using environmental and social screening criteria and tools. The need for and
form of further assessment will be determined by review and categorization.

- Assess environmental and social impacts: Programmes/projects with potential environmental and
social impacts shall be assessed using tools and mechanisms determined by a scoping process.

- Planning tool: If negative impacts are identified, a Management Plan or other similar work planning
tool will be used that outlines how management and mitigation measures will be targeted,
implemented, monitored, and reported.

- Participation: Where applicable, affected communities and stakeholders must be able to participate in
the screening and review processes. To proceed, an initiative must show it has adequately
incorporated the concerns of affected communities, often with emphasis on the role of women.

- Covenants and Articles: Covenants or articles make commitments binding. Responsibilities would be
spelled out in each UN entitys legal agreements, where applicable, concerning: 1) compliance of
activities with the sustainability measures, 2) harmonization of national social and environmental
laws and regulations with UN sustainability, and 3) the roles and responsibilities of the agency and
implementing partners.

- Grievance Mechanism: Accountability to external stakeholders and partners may require UN entities
to have a grievance mechanism in place.

- Monitoring/Reporting will be addressed within the procedures of each organization. However, there
will be a common reporting policy and mechanism so outcomes can be assessed and compiled across
the system. Sustainability monitoring and reporting procedures and mechanisms will be developed for
system-wide use.

UN entities would each be responsible for the implementation of environmental and social sustainability
measures to their own activities, though system-wide support could be available to assist. Where an entity
already has developed environmental and social sustainability measures, common measures only need be
applied where they are not already covered by the entitys own existing procedures. In the implementation
phase each agency would apply a simple gap-analysis to assess what agency level procedures exist that
correspond to the common framework. In many cases, entities will already have procedures in place.
However, where there are none the agency may create a procedure to address the missing sustainability
assessment, depending on the activities of the implementing entity.

UN entities may find they already apply all or more assessment procedures than common sustainability
measures require in order to cover issues particular to their activities. In such cases no further procedures
need be applied, but the entity would still need to report on how it addresses the environmental and social
performance of its activities.

The World Bank was the first major development institution to initiate social and environmental
safeguards. In the 1980s, in response to public criticism of its involvement in controversial projects
such as Polonoroestes BR-364 Amazon highway program in Brazil that uprooted indigenous
communities, and the Narmada dam in India that displaced 90,000 people the World Bank developed
a set of safeguard policies that require clients to consider the environmental and social implications of
projects. These policies now require clients to conduct an environmental assessment and consider a
projects potential impacts on surrounding communities.

In recent years the Bank instituted its country safeguard systems approach, in which qualifying
countries can substitute domestic laws for World Bank policies. This, however, has raised questions of
how well such an approach can be monitored. The World Bank established the Inspection Panel, a
permanent body reporting to the Board of Directors to investigate complaints, and a separate Quality
Assurance and Compliance Unit in 1999 to provide additional oversight of safeguards in Bank projects.
Currently the Bank is revising its safeguards based on the findings of a 2010 review.

International Finance Corporation (IFC), the private finance arm of the World Bank Group, adopted
its Environmental and Social Safeguard Policies and its Disclosure Policy in 1998. In 2006, the IFC
adopted a set of Sustainability Standards to guide its corporate clients in environmental and social risk
management. Through these standards, the IFCs influence stretches far beyond financing projects, acting
as a de facto standard-setter for private sector environmental and social risk management in several
high impact sectors, such as oil, gas, and mining. More than 118 financial institutions worldwide have
adopted the Sustainability Standards into their own risk management systems.

However, IFC has received some criticism of its new model. The IFC's Sustainability Standards are
outcomes-based - where IFC clients have to meet broadly defined principles, rather than specific
objectives. This was meant to give clients more flexibility, so they could choose which tools to use to
achieve the desired results. According to NGO critics, this new system has faced implementation
problems, as IFC clients fail to meet the outcomes, and IFC staff does not monitor to ensure that
outcomes are met. The IFC has a large department focused on safeguard monitoring and has a
Compliance Advisor Ombudsman as an additional accountability mechanism.

The multilateral development banks (MDBs) have followed suit and developed their own safeguards,
largely variations on those of the IFC and World Bank. However there are some notable differences. For
example, the Asian Development Bank and the European Bank for Reconstruction and Development
include human rights in their safeguards, which the World Bank does not. Additionally, some of the
multilateral bank safeguards are more stringent.

The Inter-American Development Bank (IDB) serves as an illustrative example of the safeguards work
of multilateral development banks. In 2006, IDB approved a new Environment and Safeguard
Compliance Policy that prompted environmental issues to be identified and addressed during the project
design. The IDB was the first multilateral development bank to integrate climate change impacts as part
of environmental analysis of key sectors. In 2009, it began to limit the greenhouse gas emissions of the
projects it finances, and endorsed the Extractive Industries Transparency Initiative (EITI), which seeks
greater transparency and accountability in contracts and payments in extractive industries. Additionally,
IDB has launched sustainability scorecards for biofuel and tourism projects, approved a new operational
policy for Indigenous Peoples in 2007 and, in 2009, began the process to update its existing Women in
Development Policy with the objective of contributing to gender equality and the empowerment of
women. Once approved, IDB will be the first multilateral development bank with safeguards for gender
equality.

The European Investment Bank's (EIB) environmental and social safeguard policies are based on the
EU approach to environmental sustainability. The principles, practices and standards derived from these
policies are highlighted in the Declaration on the European Principles for the Environment, agreed to in
May 2006 by the EIB and four other European multilateral financing institutions.

Global safeguards for humanitarian action are provided under the umbrella of the Sphere Project, with a
single set of minimum standards and indicators for programme design and implementation, and for four
interdependent technical sectors: water and sanitation; food security and nutrition, including food aid;
shelter, settlements, and non-food items; and health services. Also addressed in the standards are ten
cross-cutting issues: children, elderly, gender, HIV and AIDS, people with disabilities, protection,
psycho-social, climate change, disaster risk reduction and the environment. The standards are based on
the Humanitarian Charter. While widely accepted by UN humanitarian organization WFP and UNHCR,
for example, have had significant input into their creation and revision they are not required principles
for operating.

An evaluation of the Sphere Project found, encouragingly, that implementation of Sphere sustainability
measures did not create additional costs for humanitarian organizations. The Inter-Agency Standing
Committee (IASC) policy statements and guidelines complement the Sphere standards with specific
guidelines for humanitarian settings that address, for example: protection of human rights, gender and
gender-based violence, HIV, and internally displaced persons (IDPs).

Parallel to the sustainability process in development, the private sector has been developing sustainability
systems as a form of risk management and sustainability activities. The financial sector took the private
sector lead in 2003 with the establishment of the Equator Principles, often viewed as the gold standard
for financial institutions to manage environmental and social risk. Today the oil/gas/extractive industry
sector is also ramping up its efforts to work within an environmental and social sustainability framework.

The UN system employs a variety of approaches to environmental and social sustainability, such as:

- IFAD developed administrative procedures for Environmental Assessment in 1994, and has
continually considered the linkages between poverty and environment in its operations. The Fund has
developed a portfolio of investments devoted to environmental issues and rural poverty reduction and
continues to make progress in mainstreaming environmental and social objectives into its
operations (such as loans, grants and policy dialogue.

IFAD updated its Environmental and Social Assessment Procedures (ESAP) in 2009 by drawing on
lessons learned from past experience on environmental and social issues by IFAD and its partners. At
the policy and programme levels, Strategic Environmental Assessments (SEAs) are used to identify
key environmental and social issues in the earliest stages of decisionGmaking. Project impact
assessments address specific environmental and social issues, informed by the considerations raised
in the SEA. Prior to loan negotiation and board approval of the country programme, ESA stages
involve: Environmental Screening and Scoping (ESS); Environment and Social Review Note (ESRN)
development, Environmental and Social Impact Assessment (ESIA) as needed; and ESRN and ESIA
review and recommendations. The ESAP works in a complementary fashion with other IFAD
initiatives which include: (i) Environment and Natural Resource Management Policy; (ii) Climate
Change Strategy; (iii) Quality Enhancement Guidance Notes; (iv) Risk Management of Programmes;
and (v) accountability and transparency.

- As part of the UNDG UNDP adheres to the five integrated principles for UN development
cooperation and applies related UNDG guidance. In-line with this, UNDP has developed a proposal
to update their Programme and Project Management policies and procedures with an environmental
and social screening and review requirement. The proposal includes the following main elements: 1)
A brief overarching policy statement making environmental sustainability, including climate change
resilience, a cross-cutting issue for all UNDP programmes and projects and; 2) A complementary
environmental and social screening procedure to determine whether a project requires further
environmental and social review and management. Additionally, UNDP also has other sustainability
elements in place (e.g. Gender Equality Strategy, Indigenous Peoples Policy, environmental
procurement guidelines, a Greening UNDP initiative).

- The MDG Carbon Facility (UNDP programme) promotes emissions reduction projects and improves
access to carbon financing. The facility provides technical assistance, helping governments and
project proponents design and develop projects that reduce greenhouse gas emissions, and ensures
that the projects meet the Kyoto Protocols agreed standards while delivering benefits to the
environment and human development. As of 2010, no project MOU will be signed between the
Facility and its partners until an agreement to abide by a set of four environmental and social
principles is signed first. These principles address eleven points covering: human rights, labor
standards, environmental protection, and anti-corruption.

- UNEP/GEF is currently in the process of developing environmental and social safeguards for GEF-
funded projects. The process will include screening checklists for initial project development and
appraisal stages. In addition, UNEP has upwards of 20 policies/agreements/ decisions that require
UNEP to address social issues.

- The UN-REDD Programme is currently in the process of developing environmental and social
principles. The programme, a joint effort by UNDP, UNEP and FAO, is using existing UN policies
and standards as a starting point for developing the principles, such as UNDP policies on good
governance, gender, human rights, and indigenous peoples rights and the MDG Carbon Facilitys
Due Diligence Tool. By mid-2011 UN-REDD had developed a principles and criteria framework that
is being tested on a pilot basis with countries participating in the UN-REDD Programme. The
principles and criteria cover concerns related to democratic governance, stakeholder rights (including
indigenous peoples' rights), sustainable livelihoods, policy coherence, and the protection of forests,
biodiversity and ecosystem services. A social and environmental risk identification and mitigation
tool, based on the principles and criteria, will be developed next.

Sustainability measures emerge in a number of forms in the UN system and do not need to be a list of
thematic principles to be effective. While the above examples were clearly addressing a set of
environmental and social criteria, other parts of the UN have adopted policies and guidelines that offer
similar functions. For example:

- DPKO/DFS issued the Environmental Policy for UN Field Missions in 2009. The DPKO/DFS
environmental policy requires that each UN mission establish environmental objectives and operate
under a code of environmental stewardship. DPKO/ DFS are working on developing a more
comprehensive environmental sustainability system and tools with the UN mission in Sudan
(UNMIS) as a pilot, but these have not been tested yet. This would include: criteria for
environmental assessments in conflict settings, environmental baseline studies, and EIA procedures.
Development and humanitarian partners may also conduct Post-Conflict Needs Assessments with
safeguard measures. Similar to the development area, there is no single set of social standards for
post-conflict and transition settings, though DFS/DPKO does have separate Child Protection, Gender
and HIV policies.

- FAO employs Environmental Impact Assessment (EIA) procedures to ensure that its field operations
are consistent with its sixteen governing principles. These principles address various aspects of
environmental and social impact, such as Management of biological diversity for food and
agriculture, Management of forests and trees, Management of climate change impacts, and
Involuntary resettlement.

- The United Nations Development Group (UNDG) issued a guidance note on Mainstreaming
Environmental Sustainability in the UNDAF in 2009 and a Guidance Note on Climate Change in
2010, in the context of the United Nations Development Assistance Framework (UNDAF). This
guidance provides sustainability measures at the policy level but highlights the need for each UN
agency to then implement environmental assessment at programme and project level. While there is
no equivalent compilation of guidance for social issues in development the way there is for
environmental considerations, there are five cross-cutting programming principles that include gender
and a human rights based approach, and a range of thematic issues, for which there are CEB or
UNDG-approved guidelines. These are not standardized, but they all share a basis in international
human rights treaties and instruments. Within individual UNDG organizations many are using
environmental and social screening and assessment measures based on best practice. While the
terminology and content differ, most have or are developing minimum requirements to screen for
negative impacts, with recourse to more detailed assessment and modification.

- The Ramsar Convention on Wetlands employs Ramsar Advisory Missions (RAM), which include
experts relevant to the issues being addressed. The RAM assesses the situation, looks for a solution,
and makes recommendations. A key element to the mission is to set up capacity building by training
local people, local authorities and experts at the national level how to apply and use safeguards.

- WFP has integrated social and environmental safeguards in its work at the policy, project
management and operational levels, where it becomes a way of operating rather than an additional
process to employ. The organization aims for proactive engagement around social and environmental
issues. For example, WFP is integrating a carbon credit initiative into their interventions, providing
fuel-efficient stoves to ensure that beneficiaries have access to cooking processes that do not
deteriorate the environment; and is at an early stage of proactive engagement with its private sector
partners to create environmentally neutral packaging. WFP has policies that function as safeguards
for gender, children and HIV/AIDS.

ANNEX C: WHO Case Study*:
Development of an Environmental and Social Sustainability System

Sustainability System: WHO's environmental management procedure, developed in 2009, is being
applied on a pilot basis at the programme and project level.

Note: WHO takes a broad definition of environment, which includes coverage of both the
natural/physical and social/human environment. Therefore social aspects, such as occupational health and
safety, are also addressed.

Reason for developing an institutional sustainability system:

Environmental factors directly influence health and well-being. An estimated 25% of the global burden of
disease is attributed to environmental factors. WHO, as global public health agency, has a mandate to
support actions that address environmental threats to health. The fact that WHO is managing the
environmental impacts of its own activities demonstrates an important contribution to its core health
mandate. It also provides an important opportunity for WHO to demonstrates leadership about how the
health sector can contribute to sustainable development goals and objectives.

The introduction of WHOs environmental management procedure was a response to growing demands
from countries, donors, and partner agencies, some of whom have included provisions for the use of
environmental and social sustainability measures in their partnership agreements with the WHO.

Overall approach: phased and incremental.

Initial phase (pilot) is based on a practical learn-by-doing approach. This involved putting in place a
procedure that would allow for the environmental assessment and follow-up of technical projects. An
internal support function (an environmental services team) was also created to provide support (e.g.
training, ad hoc technical support) to projects as they passed through each stage of the environmental
procedure.

The use of an incremental approach has allowed for the establishment of a process that was fairly light
while at the same time satisfied donor/partner environmental requirements. In keeping the procedure
simple, the environmental services team has been able to work with relevant technical units to promote
gradual uptake and buy-in. This simplicity (e.g. use of short screening tools) has been key in helping to
reduce resistance and dispel perceptions that the application of the environmental management procedure
would substantially add to existing heavy work loads.

From the beginning the procedure (and related processes around it) was designed with the view that it
would eventually need to be reviewed and considered for potent expansion. Following a pilot phase of
implementation (two years), a scenario analysis will be undertaken to consider how, if, and by what
means the Organization could scale-up the application of its environmental procedure as part of a
comprehensive environmental and social sustainability system.

Funding: Costs associated with the administration and delivery of support services (technical advisory
services, training, and systems development) were shared across all projects that use the procedure.

Costs associated with the implementation of environmental management measures are borne by the
respective projects, if required. Following an initial period of negotiation with respective donors,
"environmental management activities" was accepted as a budget line item in the projects that were
included in the pilot. This was key to allowing projects to have the flexibility needed to re-allocate project
funds for this purpose if needed.

Priority components (areas of focus during early stage of development):

1) Putting in place an environmental assessment/management procedure

2) Training technical staff in WHO Headquarters and Regions on the use of the procedure

3) Establishment of a support and knowledge sharing function (to support screening of projects,
planning of environmental management plans, environmental monitoring and reporting (including
as part of regular donor reporting activities); and the running of a helpdesk, training, and ad hoc
advisory services).

The current system in place is a comprehensive environmental assessment procedure that includes:

- Environmental screening/classification;

- Environmental management planning;

- Monitoring and reporting;

- Sustainability evaluation.

Project managers apply the procedure with technical support from the environmental service team.
Environmental reporting is conducted with regular technical reporting.

Simpler component:

As a normative agency, WHO generally does not implement projects that have complex environmental
and social management issues such as those generated by large infrastructure development projects (e.g.
resettlement, cultural heritage, safety of dams).

More difficult components:

1. Limits of environmental responsibility: Identifying the limits of the responsibility in managing the
environment impacts of WHO projects. This is in relation with the normative nature of WHO core
functions.
2. Technical: Understanding the environmental impacts of public health programmes in specific country
contexts; e.g. on fragile ecosystems. Understanding indirect versus direct impacts generated by
projects. Developing a system for managing the environmental impacts of population based health
activities.

3. Operational: Adapting the above to WHO business culture. Advancing from the use of an
environmental procedure to an environmental and social sustainability approach that is integrated into
the Organization's core business model.

Status:

1. Environmental procedure currently being applied to a subset of WHO projects;

2. Scenario analysis under way to identify issues and opportunities for potential scale up and
establishment of an environmental and social sustainability approach that addresses other entry points
defined in the proposed common framework.

Resources used so far: Four full-time people (P4, P3, two administrative); and budget (travel, training,
investment in systems including project/information management system).

Classification: WHO uses a two-tired system: First tier: yes/ no/ deferral. Second tier is basic/ moderate/
comprehensive. The same system is used for reporting. The classification system is currently used to
trigger resource allocation and is not tied to disclosure or stakeholder engagement requirements as is the
case in some of the development banks.

Comprehensive classification triggers further review, then if deemed relevant an EIA. All projects that
are classified as moderate or comprehensive build an environmental management plan. Basic projects can
use an environmental monitoring and reporting form in lieu of an environmental management plan. Of
400 projects that have been screened so far gone through the system: 35% positive: 80% of that, basic.

Cost of environmental management measures: The per project costs of mitigating environmental issues
have so far been absorbed by existing project budgets.

Institutional support: Overall leadership and management responsibility for WHO's internal
environmental assessment activities rests with the Organizations general management group. The Public
Health and Environment Department is providing technical advice and support services to projects as
needed.

Note: * WHO is in its pilot phase of implementing its environmental management procedure and notes
that its finding to date may evolve as more experience is developed.

? Convention for
the Protection of
Cultural Property
in the Event of
Armed Conflict

? Convention for
the Safeguarding
of the Intangible
Cultural Heritage

? Convention on
Biological
Diversity

? Convention on
the Elimination
of All Forms of
Discrimination
against Women

? Convention onthe Means of
Prohibiting and
Preventing the
Illicit Import,
Export and
Transfer of
Ownership of
Cultural Property

? Convention on
the Protection of
the Underwater
Cultural Heritage

? Convention on
the Rights of the
Child

? International
Covenant on
Civil and
Political Rights

? International
Covenant on
Economic, Social
and Cultural
Rights

? International
Convention on
the Elimination
of All Forms of
Racial
Discrimination

? International
Convention on
the Protection of
the Rights of All
Migrant Workers
and Members of
their Families

? ILO Convention
87 (freedom of
association)

? ILO Convention
98 (right to
collective)

? ILO Convention
120 (hygiene)

? ILO Convention
155
(occupational
safety and health)

? ILO Convention
161
(occupational
health services)

? ILO Convention
162 (asbestos)

? ILO Convention
174 (Prevention
of Major
Industrial
Accidents)

? United Nations
Convention
against
Corruption

? World Bank
Safeguards

Environmental
Protection

? Principle 9: The
project takes a
precautionary
approach in
regard to
environmental
challenges and is
not complicit in
practices
contrary to the
precautionary
principle.

? Principle 10:
The project does
not involve and
is not complicit
in significant
conversion or
degradation of
critical natural
habitats,
including those
that are (a)
legally
protected, (b)
officially
proposed for
protection, (c)
identified by
authoritative
sources for their
high
conservation
value, or (d)
recognized as
protected by
traditional local
communities.

Human Rights

? Principle 1: The
project respects
internationally
proclaimed
human rights
including dignity,
cultural property
and uniqueness
and rights of
indigenous
people. The
project is not
complicit in
Human Rights
abuses.

? Principle 2: The
project does not
involve and is not
complicit in
involuntary
resettlement.

? Principle 3: The
project does not
involve and is not
complicit in the
alteration,
damage or
removal of any
critical cultural
heritage.

Labor Standards

? Principle 4: The
project respects
the employees?
freedom of
association and
their right to
collective
bargaining and is
not complicit in
restrictions of
these freedoms
and rights.

? Principle 5: The
project does not involve and is not
complicit in any
form of forced or
compulsory labor

? Principle 6: The
project does not
employ and is not
complicit in any
form of child
labor

? Principle 7: The
project does not
involve and is not
complicit in any
form of
discrimination
based on gender,
race, religion,
sexual orientation
or any other basis.

? Principle 8: The
project provides
workers with a
safe and healthy
work environment
and is not
complicit in
exposing workers
to unsafe or
unhealthy work
environments.

Anti-Corruption

? Principle 11: The
project does not
involve and is not
complicit in
corruption.

Transparency and
Stakeholder
Engagement

? Principle 12: The
project adopts a
transparent and
inclusive
approach and respects the rights
of local
communities and
other stakeholders
to be informed so
as to ensure their
meaningful
participation.

Special Representative
on Human Rights and
Business: Implementing
the United Nations
?Protect, Respect and
Remedy? Framework.
The Framework rests on
three pillars:

1) The State
Duty to Protect Human
Rights;

2) The
Corporate Responsibility
to Respect Human
Rights;

3) The need for greater
Access to Remedy for
victims of businessrelated
abuse.

? International Bill
of Human Rights

? ILO?s
Declaration on
Fundamental
Principles and
Rights at Work

I. The State responsibility to protect
Foundation Principles:

1) States must protect against human rights
abuse

2) States should set out clearly the
expectation that all business enterprises
domiciled in their territory and/or jurisdiction
respect human rights throughout their
operations.

Operational Principles:

3) General State regulatory and policy
functions

4) The State-business nexus:
States should take additional steps to protect
against human rights abuses by business
enterprises that are owned or controlled by
the State?

5) States should exercise adequate oversight

6) States should promote respect for human
rights

7) Supporting business respect for human
rights in conflict-affected areas

8) Ensuring policy coherence

II. The corporate responsibility to respect human rights

Foundational principles:

1) Business enterprises should respect human
rights.

III. Access to remedy

State-based judicial mechanisms

State-based non-judicial grievance
mechanisms

Non-State-based grievance mechanisms

Effectiveness criteria for non-judicial
grievance mechanisms

UN-REDD Programme

Primary:

? UNFCCC AWG
LCA37 ? REDD
+ Safeguards

? UN Common
Understanding on
the Human
Rights Based
Approach to
Development
Cooperation

Secondary:

? Convention on
the Elimination
of All Forms of
Discrimination
Against Women

? International
Covenant on
Civil and
Political Rights

? International
Convention on
Elimination of all
forms of Racial
Discrimination

? ILO Convention
169 Indigenous
and Tribal
Peoples

? UNESCO
Convention
concerning the
Protection of the
World Cultural and Natural
Heritage

? UNESCO
Convention for
the Safeguarding
of the Intangible
Cultural Heritage

Integrity of
Fiduciary and
Fund
Management
Systems - The
programme has
assessed and
addressed
corruption and
fiduciary risks.

? Criterion 2:

Transparency and
Accountability -
programme
administration
and REDD+
readiness
activities are
carried out in an
accountable and
transparent
manner.

? Criterion 3:

Stakeholder
participation - a)
All relevant
stakeholders are
identified and
enabled to
participate in a
meaningful and
effective manner;
b) Special
attention is given to most
vulnerable groups
and the free, prior
and informed
consent of
indigenous
peoples.

Stakeholder
Livelihoods

? Criterion 4:

Avoidance of
involuntary
resettlement - The
programme is not
involved and not
complicit in
involuntary
resettlement.

? Criterion 5:

Traditional
Knowledge - The
programme is not
involved and not
complicit in
alteration,
damage or
removal of any
critical cultural
heritage or the
erosion of
traditional
knowledge.

? Criterion 6:

Social and
political wellbeing
- Social and
political
implications are
assessed and
adverse impacts
on social and
political
structures
mitigated.
Benefits are
shared equitably.

Policy coherence

? Criterion 7:

Low-
Emission,
Climate
Resilience
Development
Coherence - The
programme
coheres with
relevant strategies
and policies at all
levels of
government.

IFC moved from
safeguards to
Sustainability
Standards in 2006
(2007 for MIGA);
IFC added
Sustainability
Standards on Labor
and Working
Conditions, and
Community Health,
Safety, and Security
to the two
Sustainability
Standards derived
from the Bank?s
social safeguards.
IFC/MIGA standards
are considered more
innovative and better
monitored than those
of the WB.

Mission: To put
justice and equity at
the heart of responses to climate change,
particularly those
concerned with how
best to respond and
adapt to the challenge
that it poses for the
poorest and most
vulnerable.

? Respect and protect human rights

? Share Benefits and Burdens Equitable

? Harness the Transformative Power of
Education and Research

? Ensure that Decisions on Climate Change
are Transparent and Accountable

? Highlight the Gender Dimension

? Use Effective Partnerships to Secure
Climate Justice

PRI (Principles for
Responsible Investment)
An investor initiative in
partnership with UNEP
Finance Initiative and
the UN Global Compact

In 2005 the UN
Secretary-General
invited a group of the
world's largest
institutional investors
to join a process in
developing the
Principles for
Responsible
Investment.
Individuals
representing 20
institutional investors
from 12 countries
agreed to participate
in the Investor
Group. The Group
accepted ownership
of the Principles and
had the freedom to
develop them as they
saw fit.

The Group was
supported by a 70-
person multistakeholder
group of
experts from the
investment industry,
intergovernmental
and governmental
organizations, civil
society and
academia.

P2: We will be active owners and incorporate
ESG issues into our ownership policies and
practices.

P3: We will seek appropriate disclosure on
ESG issues by the entities in which we invest.

P4: We will promote acceptance and
implementation of the Principles within the
investment industry.

P5: We will work together to enhance our
effectiveness in implementing the Principles.

P6: We will each report on our activities and
progress towards implementing the
Principles.

MDBs

Initially based their
safeguards on the
International Bank
for Reconstruction
and Development (IBRD) and
International
Development
Association (IDA),
but some have since
customized and
expanded these
policies.

IDB seems to have
the most forwardthinking
policies: it
was the first
multilateral
development bank to
integrate climate
change impacts as
part of environmental
analysis of key
sectors. In 2009, it
began to limit the
greenhouse gas
emissions of the
projects it finances,
and endorsed the
Extractive Industries
Transparency
Initiative (EITI), and
is the first MDB with
a safeguard for
gender equity.

IDB:

? Environment
and safeguards

IDB:

? Involuntary
resettlement

? Indigenouspeoples

? Gender equality
in development

Sphere Project and
Humanitarian Charter

The Humanitarian
Charter is based on
the principles and
provisions of
international
humanitarian law,
international human
rights law, refugee
law and the Code of
Conduct for the
International Red
Cross and Red
Crescent Movement
and Non-
Governmental
Organizations in
Disaster Relief. The
Minimum Standards
and the key indicators were
developed using
broad networks of
practitioners in each
of the sectors. Most
of the standards and
the indicators
consolidate and adapt
existing knowledge
and practice. Over
400 organizations in
80 countries have
contributed to the
development of the
Minimum Standards
and key indicators.
The Humanitarian
Charter used for its
principles:

? Convention
against Torture
and Other Cruel,
Inhuman or
Degrading
Treatment or
Punishment

? Convention on
the Rights of the
Child

? Convention on
the Status of
Refugees

? Geneva
Conventions and
Additional
Protocol I and
Additional
Protocol II of the
Geneva

Conventions
? International
Covenant on
Civil and
Political Rights

? International
Covenant on
Economic,
Social, and Cultural Rights

? Universal
Declaration of
Human Rights

The Humanitarian
Charter principles:

? The right to life
with dignity

? The distinction
between
combatants and
non-combatants

? The principle of
non-refoulement
The Humanitarian
Charter encompasses
a set of Minimum
Standards for:
programme design
and implementation, and for four
interdependent
technical sectors:
water and sanitation;
food security and
nutrition, including
food aid; shelter,
settlement and nonfood
items; and health
services.

The Charter also
identifies10 cross
cutting issues that
have relevance to all
sectors: children,
elderly, gender, HIV
and AIDS, people
with disabilities,
protection, psychosocial,
climate
change, disaster risk
reduction and the
environment.

World Bank

In 1989 the World
Bank introduced
Operational Policies
and Bank Procedures
for environmental
assessment of Bankfinanced
projects,
which were updated
as Operational
Directive 4.01 in
1991. The Bank
adopted an
involuntary
resettlement policy as
an Operational
Manual Statement in
1980, which was
revised as OD 4.30 in
1990. Other
environmental and
social policies were
added over time to
address individual
environmental and
social risks.10 ?do no
harm? safeguard
policies were
established in 1997,
some of which have
been updated since.

? OP4.01:
Environmental
Assessment

? OP4.04: Natural
Habitats

? OP4.09: Pest
Management

? OP4.36: Forests

? OP4.37: Safety
of Dams

? OP4.11:
Physical
Cultural
Resources

Social safeguards:

? OP4.10:
Indigenous
Peoples

? OP4.12:
Involuntary
Resettlement
Legal safeguards:

? OP7.50: Projects
on International
Waterways

? OP7.60: Projects
in Disputed Areas

Working towards a Balanced and Inclusive Green Economy

A United Nations System-wide Perspective

31 October 2011

Executive Summary

1. Introduction

In September 2009 the United Nations (UN) Environment Management Group agreed to establish an
Issue Management Group on Green Economy. This group was tasked to prepare a report to assess how
the UN system could coherently support countries in transitioning to a green economy. The report is
expected to facilitate a common understanding of the green economy approach and the measures required
for the transition. The report is envisioned to also contribute to the preparatory process for the 2012 UN
Conference on Sustainable Development (UNCSD or Rio+20) where the green economy in the context
of sustainable development and poverty eradication is one of the two themes along with the institutional
framework for sustainable development.

A green economy is an approach to achieving sustainable development. It requires breaking away from
resource intensive growth models, a transformation of consumption and production into more sustainable
patterns, and increased value added created and reinvested in resource-rich supplier communities in the
developing world. The context for this approach is the increasing resource intensity of consumption in
developed countries even though their production is becoming less resource intensive, which implies the
shifting of environmental impact to other countries through international trade. At the same time, the
resource intensity of both consumption and production in developing countries may increase in absolute
terms in their industrialisation process. These trends tend to exacerbate resource constraints and breaking
the planetary boundaries.

A broader context is the projected population growth, which further raises the stakes in poverty reduction
efforts. These efforts depend on higher consumption and production. Without appropriate policies in
place, population growth will further significantly increase pressures on all natural resources. The likely
growth of the world population from 7 billion today to over 9 billion by mid-century requires a
considerable increase in economic output to ensure food security, reduce poverty, raise living standards,
and create full, productive, and remunerative employment for the populations. Demographic change
together with urbanisation not only heightens the need for a swift transition to a green economy, but also
calls for policies to address population dynamics within a human-rights based framework. These policies,
most notably, include universal access to reproductive health care and family planning as well as the
empowerment of women and appropriate investments in education, especially for girls and women who
are too often left behind.

In these contexts, a green economy requires the inclusion of the marginalised in all development
processes. It also requires the reduction of gaps between developing and developed countries and regions
in labour productivity and in the capacity to generate and have access to technology and scientific
knowledge. It requires bolstering the capacity of developing countries to develop, review, and implement
science, technology, and innovation policies that are oriented towards green solutions to the climate, food,
and energy crises. This includes strengthening science education, enhancing research and development
(R&D) capacities, and fostering innovation through South-South Cooperation, North-South Cooperation,
and public-private partnerships. For commodity-dependent countries, it is particularly important that they
have access to new green opportunities to diversify their economies.

Specifically, in a transition to a green economy, public policies will need to be used strategically to
reorient consumption, investments, and other economic activities - in line with domestic development
agendas and contexts - towards:

- Reducing carbon emissions and pollution, enhancing energy and resource efficiency, and
preventing the loss of biodiversity and ecosystem services, including the development of
efficient, clean, and low environmental impact technologies, buildings, and transport
infrastructure, investments in renewable energy, application of the life cycle approach,
promotion of environmental goods and services, sustainable sourcing of materials, and the
maintenance and restoration of natural capital consisting of land, soil, forest, freshwater, the
oceans, marine resources, wild fauna and flora, and other biodiversity components; and

- Improving access to energy, food, freshwater, biological resources, sanitation services, public
health and health care, new jobs, labour protection, social protection systems, information
and communication technologies (ICTs), and training and education including education for
sustainable development and the promotion of sustainable consumption.

Priorities should be given to developing public policies that meet social, environmental, and economic
objectives, that focus on sustainable livelihood approaches, that increase access to services for the
marginalised, and that bring about the required structural change associated with a green economy
transformation. But a green economy is not a one-size-fits-all path towards sustainable development.
From its dynamic policy toolbox, decision makers - local or national - can draw ideas coherent with their
specific sustainable development agendas and contexts.

Proper incentives provided through economic instruments, regulations, sound framework conditions for
innovation and technology diffusion, distributional policies, and voluntary initiatives can help channel
investments - public and private - towards targeted sectors and enhance the effectiveness and fairness of
such investments. They can also affect incentives and public awareness, thereby contribute to behavioural
changes in production, consumption, and lifestyles. The mix of public policies for a green economy will
differ across countries based on their specific socioeconomic conditions, institutional settings, resource
endowments, and environmental pressure points. All countries, however, stand to gain from pursuing a
green economic transformation, achieving direct economic gains through enhanced resource productivity
and new sources of growth and jobs from innovation and the emergence of green markets and activities.
In certain economies, a major development benefit of moving towards a green economy is manifested in
greater human health and well-being as a result of lower pollution.

2. Investing in infrastructure and target sectors

The call for a green economy comes during a global financial and economic crisis to which many
governments have responded with stimulus packages including particular provisions for infrastructure
development. As governments seek to scale up the implementation of their provisions, these stimulus
packages and their green components are paving the way for longer-term policy reform and infrastructure
development. They hold the potential to design new growth paths and avoid locking capital into
inefficient and polluting technologies.

Ongoing systemic problems such as global climate change give the greening of infrastructure additional
importance. In developing countries, the need for investments in greening infrastructure could reach
USD264-563 billion by 2030 with an additional USD30-100 billion for climate adaptation. If these
investments are made, it could mean new jobs, new incomes, and better health while reducing
households and countries energy bills in the long run, lessening the fiscal burden from unemployment
and health payments, and providing new business opportunities. The Green Climate Fund agreed in
Cancun in December 2010 (with an expected launch in 2013) and the developed country commitment to a
goal of jointly mobilising USD100 billion in public and private funds per year by 2020 as financial
support for developing countries can reduce the infrastructure funding gap once operational.

Because of the valuable services they provide, healthy ecosystems - both terrestrial and marine, wild
fauna and flora - and the underlying biodiversity play the role of infrastructure as well. Though often
unacknowledged, that role is all the more critical in cities and city-regions where the majority of humans
live and the fastest economic growth continues to occur. Their maintenance or restoration - including for
ecosystem based climate adaptation and species management - should be considered as a priority for
investments.

Greening infrastructure including the buildings, energy, and transport sectors, which are significant
consumers of resources and emitters of greenhouse gases (GHGs) - is urgent as emerging economies and
developing countries will build the bulk of their infrastructure in the next few decades. Strategic planning
in city-regions is critical for piloting innovations and delivering infrastructural transitions at an increased
scale. Given the substantial inertia and committed emissions of infrastructure investments, which would
lead to the lock-in of unsustainable fossil fuel consumption patterns, delaying action in developing
countries by 10 years could result in doubling the amount required to mitigate GHG emissions and make
climate adaptation very costly.

Investing in greening infrastructure, however, must leverage funding for broader investment needs in
developing countries estimated at USD1.0-1.5 trillion per year, only about half of which has been met. In
the absence of adequate funding for adequate infrastructure, the deployment and use of individual power
generators and batteries, unregulated wells, and open drains carries significant social, environmental, and
economic costs. Tackling these issues requires scaled-up and accelerated international cooperation,
innovative technologies, financing mechanisms, integrated city-regional spatial planning, and delivery
models including decentralised power generation sourced from solar and wind, which could generate
multiple benefits at a relatively low cost. By transitioning now, developing countries have the potential to
avoid costly retrofits.

Beyond infrastructure, the greening of agriculture, industry (including mining or extractive industries),
and services is also crucial for satisfying demands of an urbanising global population for higher living
standards while adjusting to increasing environmental constraints. In the agriculture and food sectors,
investments should aim at improving food and nutrition security and livelihoods while reducing emissions
and other negative environmental impacts along the entire food chain through:

- reducing farm-to-table transport distances;

- sound soil and nutrient management, including reduced use of chemical fertilisers and pesticides
and promotion of organic agriculture;

- efficient harvesting and water use;

- reducing the environmental impacts of animal husbandry;

- enhancing production system resilience and associated biodiversity functions such as pollinators
and natural pest predators;

Making these investments employment intensive will benefit workers, communities, and local enterprises.
Some of the priority areas requiring policy attention include: increasing productivity in a sustainable
manner, in particular by according a higher priority to R&D, innovation, education, extension services,
and information; ensuring that well-functioning markets provide the right signals and, in particular, that
prices reflect the scarcity value of natural resources as well as the positive and negative impacts of their
use; establishing and enforcing well-defined property rights so as to ensure sustainable use;and
enhancing access by the poorest to agricultural inputs, including credit and insurance, as well as to food
and nutritional security at an affordable price.

In the industry sector, investments in renewable energy technologies and more resource- and energy-
efficient production processes could generate multiple benefits, but distributional effects need to be taken
into account with an emphasis on improving access to cleaner technology and employment opportunities.
Apart from renewable energy, investments in the broad category of environmental goods and services
sector ranging from clean production processes, low impact logistics, and material-saving packaging to
natural products and services from ecosystems including the often neglected oceans also have a potential
for generating multiple benefits.

The global environmental markets were projected to reach USD688 billion in 2010 and just under
USD800 billion by 2015. As demand for environmental services, equipment, and technologies has been
increasing, mainly pushed by regulatory demands in developed countries, the environmental industry has
become a dynamic growth pole in OECD countries. This market provides important opportunities for
small and medium-sized enterprises (SMEs). The greening of industry holds the potential for opening up
vast new markets such as services in the prevention and management of waste and markets created
through the application of life cycle approaches.

In the service sector, ICTs as applied, for example, to intelligent transport networks and smart grids can
become enablers of resource efficient development. While intelligent use of ICTs can help industries and
consumers to dematerialise, the sound management of electronic waste poses new risks and opportunities.
A growing number of transport sectors are also scaling up their responses to climate and related risks and
opportunities. In the aviation sector, substantial investments are needed to scale up the production of
fuels from sustainable biomass or renewable oils to commercially-viable levels for meaningful uptake by
the sector while reducing the emissions of GHGs, particulate matter, and fuel sulphur content.

Payments for ecosystem services (PES) is a tool used by many sectors, notably agriculture and forestry, to
promote the management of land resources and provide the necessary incentives for restoring rural
livelihoods and for rehabilitating damaged ecosystems. It aims at adapting to and mitigating against
climate change and at preserving biodiversity or reducing its loss. It is also increasingly used for income
generation in rural areas and, thus, can support the transition to a green economy. Standards can be
voluntary through, for example, environmental labels that are in demand by environmentally-aware
consumers willing to pay price premiums for quality and environmental friendly products.

3. Investing in people and social infrastructure

At the heart of the green economy approach is the desire to improve human well-being and social equity,
which implies targeted investments in human and social capital on top of investments in natural capital
and green physical capital (e.g. clean technologies). A green economy must contribute to the Millennium
Development Goals (MDGs), which are likely to be pursued beyond their 2015 target year with a
continued focus on enhancing the access of the poor, women, and other vulnerable and marginalized
segments of society to services, resources, and opportunities, as well as supporting necessary social
transformations. The UN Millennium Project projected the cost of meeting the MDGs in all countries to
amount to USD121 billion in 2006 and USD189 billion in 2015 (in 2003 US dollars). In the global
transition towards a green economy, these financing gaps must be addressed in synergy with the
investments needed to green infrastructure and other economic sectors. Poverty reduction policies should
be formulated with a view to encouraging sustainable consumption and production patterns and
establishing a green path for future development.

Transitioning to a green economy requires a fundamental shift in the way we think and act. For this to
happen, investments in peoples capacities and the fulfilment of their entitlements are needed. With
greater education, training, information, awareness, understanding, and participation in decision-making
processes comes greater ownership and responsibility to take action at a grass roots level and change
individual and collective behaviour and production/consumption patterns. Investments and technological
progress are important in moving towards a green economy, but equally important is awareness,
motivation, and empowerment of individuals and communities.

To break the cycle of poverty and over-exploitation of resources, a firm commitment is needed to make
long-term investments in quality education and training. ESD including climate change education is a
particularly important part of quality education. It provides people at all levels of education, in particular
youth, with the skills, competencies, and knowledge needed to prepare for green jobs and to change
unsustainable consumption and production patterns. It must, therefore, be integrated into educational
curricula at all levels and in all educational settings. Communication and media, including the generation
of information on sustainable use of resources for poverty reduction and access to such information is also
important. Exclusion and inequalities linked to wealth, gender, ethnicity, language, location, and
disability are holding back progress in providing people with basic education. Girls are disproportionately
affected.

In addition, culture must be an integrated part of a green economy transition. Sustainable tourism, cultural
as well as creative industries, and heritage-based urban revitalisation are powerful economic sectors that
generate green employment, stimulate local development, and foster creativity. Local and indigenous
knowledge systems and environmental practices must also be taken into account as they provide valuable
insight and tools for tackling ecological challenges, preventing biodiversity loss, reducing land
degradation, and mitigating the effects of climate change.

A green economy and green jobs present a significant opportunity to overcome poverty and inequality by
creating more and better jobs. This can be a major contribution to inclusive growth. A transition to a
green economy can lead to net gains in employment, not only in green jobs but across the economy
compared to the unsustainable conventional growth path. It is thus not necessary to chose between the
environment on the one hand and employment and economic growth on the other. In order to address the
root causes of poverty and inequity, however, any green economy initiatives should include supporting
social policies and measures, in particular for the provision of access to better quality social protection.
Coherence between social, environmental, and economic policies is needed to maximise opportunities and
buffer the social cost of the transition. A transition to a green economy needs to project a vision of a
greener as well as a fairer economy and society.

Addressing the unemployment challenge through a green economy approach requires increased
investments in sectors with high potential for the creation of productive employment opportunities. It also
requires exploiting the potential synergies between different policy objectives. Labour market policies
could support targeted investments by focusing on improving the skills of the most vulnerable - women,
youth, informal workers, small farmers, and the unemployed - with particular attention to imparting skills
of value in a green economy.

Measures to support the most vulnerable groups such as access to a social protection floor and social
safety nets are essential to achieve social inclusion, to deal with the restructuring towards a greener
economy, and to adapt to climate change as well as to lift marginalised people out of the poverty trap and
include them in a green development path. They are also needed to protect groups that might be
negatively affected by a transition towards a green economy as may be in the case of workers in the fossil
fuel sectors. Such investments include access to nutritious food, health services, education, training and
retraining, and unemployment benefits. It requires an improved and sound social and physical
infrastructure as well. A just transition also requires social dialogue and civic participation in identifying
the employment impacts of green economy policies and to charter the way to economic diversification
that generates green jobs.

4. Enabling the transition towards a green economy

4.1 Mainstreaming: environmental and social integration

A fundamental challenge the green economy debate poses to all public institutions is that of the failure to
effectively converge, align, and integrate work across the social, environmental, and economic
dimensions of sustainable development. This is in part a failure of institutional collaboration and
coherence of policy approaches between different UN entities at international and national level. The
green economy approach requires a new level of mainstreaming that goes beyond business-as-usual. The
linkage of green and economy with human well-being and social equity as core goals requires
renewed commitment to more appropriately measure and value human and natural assets and put them at
the centre of economic development. It also requires more inclusive and pro-poor growth.

Investments in efficient transport systems, housing energy efficiency improvements, sustainable sourcing
of biological resources, and environmentally sustainable agricultural practices, among other priorities,
have the potential to generate significant social benefits. For example, household energy investments to
replace inefficient biomass/coal stoves with improved stoves and cleaner fuels as well as household
waste-for-biogas production could improve the sanitation and health of 3 billion people and the well-
being of women in particular. These linkages point to the need for an integrated approach, which should
provide a basis for prioritising investments in a green economy. Those investments that generate both
environmental and social benefits should be the priorities.

4.2 Public and private financing

A global transformation towards a green economy will require substantial financial resources and
coherent criteria for their use. Subsidy reforms and ecological taxes can unlock a substantial amount of
funds to support a balanced and inclusive green economy transition. If, for example, industrialised
countries were to use carbon taxes or auctioned emissions permits to reach the GHG emission targets they
pledged in the Cancun Agreements, they could raise as much as 0.6% of their GDP or about USD250
billion in revenues per year by 2020. In addition, other forms of carbon finance, PES, green stimulus
funds, micro-finance, social responsibility investment funds, green bonds, and other local financial
innovations have emerged in recent years and can open up the space for large-scale green financing. To
further scale up the financing for a green economy, public-private innovative financing mechanisms are
needed to tap institutional investors capital.

The private sector is a major driving force in many national and local economies beside farmers, foresters,
and fisher folks. With its capacity to invest and innovate, the private sector is uniquely positioned to
create solutions that can reduce emissions and resource use while generating growth and employment
opportunities including for the poor. The bulk of green investments will come from the private sector.

The role of the public sector, however, is indispensable for influencing the flow of private financing and
triggering a green economy transition. Public spending is important for setting the appropriate investment
context, institutionalising more sustainable consumption and production patterns, and building the
necessary capacity for the transition. Governments including at the local level could develop PES
schemes, focus on greener public infrastructure, including for access to food, water, sanitation, and
energy services as well as on poverty eradication, gender equality, and biodiversity and ecosystem
conservation and sustainable use. Governments should also use their resources, including through public
procurement, to leverage financial flows from the private sector towards green and socially beneficial
economic opportunities including at the local level.

Effective green investments and innovation and the adoption and dissemination of green methods of
production require good governance. Corruption is a key bottleneck for investments as are the absence of
the rule of law, clear regulations, transparency, and predictability. A level and transparent playing field
will be necessary for a green economy to deliver as required. Governments should involve the private
sector in jointly identifying impediments to a green economy and establishing clear, stable, and coherent
policy and regulatory frameworks to facilitate the integration of social, environmental, and governance
issues into investment decision-making. At the same time, given the importance of international
investment as a vital source of finance and a powerful vector of innovation and technology transfer,
governments are encouraged to continue monitoring their investment treaty practices with regard to green
economy objectives to ensure that they encourage green investments without leading to green
protectionism.

The UN system and the multilateral development banks have an important role to play in supporting
investments in resource efficient development and advancement of sustainable consumption and
production. They can provide technical advice and capacity support to governments in the following
areas:

- using a range of instruments to support and fund development of climate-smart agriculture and
greener and more resilient infrastructure.

To support the kind of governmental decision-making that will underpin a balanced, inclusive and green
transition, however, entities of UN system and international financial institutions will need to work
together more coherently based on their respective mandates and comparative advantages. To truly
contribute to a green economy transition, investments and interventions need to be environmentally sound
and socially inclusive to ensure that they are neither harmful to the environment nor disadvantageous or
harmful to the poor and that the continued flow of funding towards education, health, and social
protection activities is guaranteed.

4.3 Full-cost pricing

Full-cost pricing, which includes full social and environmental cost, is an essential tool for changing
investments as well as consumption and production patterns and motivating innovations. Apart from
reflecting social and environmental costs in prices through taxes, full-cost pricing also implies the phasing
out of harmful subsidies, such as those on fossil fuels, fisheries, forestry, water use, land use, and
agriculture. These subsidies not only encourage carbon emissions, resource depletion, and environmental
degradation, but can also cause trade distortions and strain public finance. Developing and emerging
economies are currently providing subsidies to fossil fuel consumption in an estimated amount of
USD409 billion per year while OECD countries provide USD45-75 billion in support to fossil fuel
production and use. In comparison, government support to electricity from renewable and biofuels
globally was estimated to amount to USD57 billion in 2009.

Full-cost pricing contributes to a more level playing field between established, brown technologies and
newer, greener ones. Distributional consequences, especially the impacts on the poor and marginalised
should be duly considered when designing and implementing subsidy reforms. UN entities can help
governments and others to find the most appropriate ways of phasing out harmful subsidies while
combining that with the introduction of new incentive schemes to encourage positive steps forward.

Governments need to stimulate inter-ministerial collaboration to communicate the societal implications of
under-pricing to all concerned and collectively design fiscal and tax policies as well as policies on how to
use the newly generated revenue. Consultations with major groups including trade unions, employers
organisations, and womens associations on the various policy options for implementing full-cost pricing
need to take place in order to decide on options that enjoy the broadest societal support. Such
consultations will also help strengthen these groups and facilitate participatory policy dialogues especially
where social organisations are weak. Any adverse effects of changes in prices of goods and services vital
to the welfare of vulnerable groups must be compensated for and new livelihood opportunities provided.

At the international, sub-regional, and regional levels, there is a need for policy coherence and financial
and technological cooperation, as countries may not be willing to adopt full-cost pricing unilaterally or in
isolation for fear of losing international competitiveness. In spite of this potential collective action
problem, which should be addressed at global and regional levels, it is still beneficial for countries to
take full-cost pricing measures independently as in the case of the European carbon emission trading
system. As commodity prices including fossil fuel prices are generally expected to continue to rise,
countries can benefit from the development of resource-efficient technologies and renewable energies
even if others continue with business- as-usual.

4.4 Regulatory approaches

To support the transition to a green economy, governments can employ mandatory technical regulations,
voluntary standards, and information-based instruments. Often, regulatory frameworks are required to
support the greening of sectors that rely on natural resources. At the international level, global
conventions including, but are not confined to, Multilateral Environment Agreements (MEAs), can foster
global commitments and promote coordinated activities on key aspects of the green economy agenda. In
some cases, legislators may choose to adopt domestic regulatory frameworks to further these global
objectives. The role of international non-environmental agreements such as on labour standards and
human rights in a green economy, however, requires further research.

Regulatory approaches are often taken to support price-based measures or when a ban or binding
limitation is deemed necessary to stop certain damaging activities or bring about behavioural changes.
Regulations can also provide enabling conditions and incentives, establish the needed market signals and
certainty for businesses to make investment decisions, deploy green technologies, accelerate green
innovation, and foster clean technology development and diffusion. Information-based instruments, such
as labelling schemes and voluntary reporting, which show the environmental and social implications of
goods and services coupled with appropriate pricing, can alter consumption habits and promote demand
for green and socially responsible goods and services while stimulating suppliers to design and produce
such products and services and improve their environmental and social performance.

The success of regulatory approaches hinges on the certainty of policies as well as the quality and
credibility of regulatory institutions and their compliance mechanisms, including justice systems.
Regulatory institutions need to be transparent, accountable, efficient and designed with a view to
minimising additional costs for business and consumers. Effective compliance mechanisms should be put
in place in order to achieve the desired outcomes. Fostering regulatory approaches to support a green
economy requires strengthened integrated institutional framework and governance. To avoid the
proliferation of national regulations and standards, the use of relevant international standards is essential.

In this regard, a number of UN entities have been involved in developing international regulations,
standards or guidelines to be used as a basis for national regulations or standards to support green
economy objectives. Examples are the mandatory emission targets under the Kyoto Protocol, the
mandatory measures introduced to reduce GHG emissions from international shipping - the first global
mandatory GHG reduction regime for an international industry sector, and the framework developed to
reduce GHG emissions from international aviation - the first sector with a shared global commitment to
increasing fuel efficiency and stabilising its GHG emissions in the medium term. It is important that
regulations and standards to promote the green economy do not become a source of green protectionism,
in line with Principle 12 of the Rio Declaration on Environment and Development. In this respect, WTO
Agreement on Technical Barriers to Trade, while recognising the important role of standards and
regulations for the achievement of legitimate policy objectives, seeks to ensure that they are not
discriminatory and do not create unnecessary barriers to trade.

The UN system and the Bretton Woods Institutions (BWIs) have an important role to play in supporting
the transition to a green economy in the area of regulatory approaches. They can encourage the
ratification of relevant international agreements, assist the Parties to implement and comply with related
obligations, develop relevant international standards and guidelines, promote good regulatory practice,
and build capacity, including that of legislators at national and sub-national levels to prepare and ensure
compliance with regulations and standards in supporting the transition to a green economy.

4.5 Sustainable trade

Trade can expand the markets for green goods and services and diffuse clean and resource-efficient
technologies and production methods. It can also transmit the growing environmental and social
preferences of firms and consumers. An open, rules-based and non-discriminatory multilateral trading
system that provides predictability, security, and stability is essential for enabling green investments,
innovation, and technological change, and for preventing trade protectionism disguised as green economy
measures.

Positive steps are needed to take the Doha Round negotiations forward, which could contribute to a
transition towards a green economy. These include negotiations on the removal of trade distortions, in
particular of harmful subsidies including in fisheries and agriculture, and the elimination or reduction of
tariff and non-tariff barriers to environmental goods and services. Support is needed to assist developing
countries, especially their low-income producers and SMEs, to identify green export opportunities,
develop capacity in the production and export of related goods and services, facilitate access to
information, training and education, finance, technologies, and markets, and increase their
competitiveness. International and regional organisations have an essential role to play in this regard.

Freer trade should be tied to important human values, welfare goals, and inclusive growth, assisting those
developing countries that are marginalised in the global trading system. Trade policy also needs to be
accompanied by policies in both the social and environmental spheres.

4.6 Innovation and technology transfer

Technological innovation in product design, production processes, service systems, and organisational
management is essential for reducing negative environmental and social impacts and improving resource
efficiency. It is also essential for the development of new products, services, and technologies that
promote decent work, benefit society, and support economic diversification and productivity-enhancing
structural change.

Changing user behaviours in resource demanding sectors such as food, housing, and mobility, however,
requires innovation not only in hard technologies but also in knowledge, management systems, and
incentive mechanisms, all of which are important attributes of social innovation. The use of ICTs can help
generalise access to relevant information in decision making, anticipate and manage potential risks from
new technologies, and optimise sustainability and cost-efficiency in all economic sectors, including in
workplaces through workers-management collaboration and dialogue. UN entities need to scale up
support for education and training, small business development, continual improvement in resource
efficiency, and access to innovative financing. In addition, they should provide practical tools that support
intellectual property rights and the critical complementary know-how to enable the transfer, adaptation,
and widespread use and dissemination of green technologies. It is critical that local actors have ownership
of the innovative process and new technologies and that local and indigenous knowledge is part of the
change.

The UN system and the BWIs have indeed actively supported technological and social innovations in
developing countries. Their activities range from policy advice and policymaking tools to technical and
managerial engagement with industries on resource efficiency and cleaner production, financing and
marketing support, skill and capacity development, and facilitating the development of knowledge
networks and platforms. There is, however, a need for improving the delivery of joint, interagency
initiatives as well as mainstreaming programmes on the introduction and effective implementation of new
technologies and standards including North-South and South-South technological transfer and
cooperation that a green economic transition requires. International policy coordination, e.g. through
adherence to MEAs and technical and scientific capacity building in the receiving country are also key for
inducing technology transfer and ensuring that markets for innovations are not fragmented across
different countries.

4.7 Assessment and indicators

An integrated policy assessment framework including improved accounting systems and indicators to
capture relevant information and measure/monitor progress is an essential part of making the green
economic transition towards sustainable development. The policy framework - based on a wide range of
assessment approaches and tools - should include the participation of all relevant stakeholders.

On accounting systems and indicators, an important starting point is the UN System of Environmental-
Economic Accounting (SEEA), which will become an internationally agreed statistical framework in
2012. It is important that policy makers begin to use this system systematically, taking into account the
effects of economic activities on all forms of capital when making policy decisions. It should be noted,
however, that the SEEA is not designed to fully capture the social implications of economic activities.
Dedicated efforts are needed to standardise and publicise social indicators and use them in public policies
in conjunction with other indicators.

Building on the SEEA and other relevant initiatives such as the work on resource indicators by the
International Resource Panel, the Wealth Accounting and Valuation of Ecosystems, The Economics of
Ecosystems and Biodiversity, and the work on monitoring progress towards green growth, three
interrelated groups of indicators may be considered:

- indicators that measure the green transformation of key sectors including environmental
investments, environmental goods and services, and green jobs;

- measures of decoupling economic productivity and human well-being from resource and
emission intensity, including eco-efficiency, re-use and recycling, dematerialisation (i.e. doing
more with less), substitution, and material flow indicators; and

- overall measures of well-being with a particular focus on natural capital, poverty, social equity,
and social inclusiveness - indicators of how well a green economy has delivered on human-
centered development.

UN entities need to improve their ability to contribute to the further development of the SEEA, including
programmatic support to institutions in developing economies to improve their capacity to collect,
organise, interpret, and communicate the relevant data. Public institutions can also learn from experience
gained by responsible businesses in defining and applying core and additional indicators in their
reporting systems and how non-financial information is increasingly linked with financial information in
emerging models of integrated reporting. Efforts should also be made to build any new indicator on the
basis of existing macro-level indicator sets such as the Human Development Index and indicators for
sustainable development. In addition, and importantly, the system of green economy indicators should
allow flexibility for countries to develop their own set of indicators that reflect their particular national
and industrial circumstances.

5. The way forward for the UN system

5.1 Mobilising expertise

It is important to organise the expertise of the UN system including BWIs in a targeted and integrated
manner when providing green economy related services to countries. It is also important to ensure that
this expertise is delivered in a coherent manner and in accordance with nationally and locally identified
challenges and priorities. To do these, it is necessary to sensitise policy and research staff as well as
operational staff, at UN entities headquarters and in their regional and country offices to the green
economy approach and to develop their capacity to align it to countries' policy frameworks and priorities.
In some cases this may require the creation of special units within UN entities with expertise in economic
analysis to support other experts in defining the economic case and supporting the mainstreaming of
environmental and social goals in economic policy programmes.

At the global inter-agency level this expertise is being mobilized through inter-agency mechanisms such
as the High-Level Committee on Programming, the Environment Management Group and in a
synthesized way directly targeting the work of UN Country Teams (UNCTs), the United Nations
Development Group (UNDG). At the regional level the UNDG Regional Directors Team pool together
resources needed to support UNCTs in their regions.

Regional and sub-regional cooperation should be enhanced further to support replicating, up-scaling, and
advancing green economy initiatives, which have been successfully applied in various countries. In this
regard, the UN Secretariat through the Regional Commissions provides a unique platform for regional
dialogues and consensus building. In addition, the Regional Commissions as the Chairs of the UN
Regional Coordination Mechanisms have the opportunity to also mobilise the expertise of the entire UN
system as well as regional and international institutions and research community outside of the UN
system.

5.2 Consolidating country assistance frameworks and strategies

Given the inter-sectoral and inter-agency nature of the green economy transition, it is important that any
green economy policy development and programme support by a UN entity is demand driven,
coordinated with the work of other agencies through the UNCTs and the cycle of the UN Development
Assistance Framework. The Delivering as One approach being piloted in eight countries and applied in
another 24 countries offers opportunities that are particularly noteworthy for the transition to a green
economy by ensuring that support to countries in the transition to a green economy is delivered in an
integrated manner and through a dialogue with all relevant parts of the host government. The ongoing
challenge of improving integration across the three pillars of sustainable development is also one of
improved interagency collaboration across the global, regional, and national level.

5.3 Generating green, efficient, and effective financial support at scale

Public resources are getting increasingly scarce, calling for a greater focus of public funds to catalyse
larger scale private investments in supporting a transition to a green economy. In many cases private
sector investment flows await regulatory reform and the introduction of new measures that facilitate the
opening up of new markets in environmental goods and services and the mitigation of risks. Private sector
financial flows seek adequate financial instruments for investing in the green economy that incorporate an
acceptable risk/return proposition. Promoting country ownership and the alignment of UN system's
programmes and projects with national priorities will be critical. Countries also need support in
developing capacities to attract and drive green investments. In addition, there is a need to identify and
develop new sources of international funds at scale that support the global transition towards a green
economy. Efforts need to be made to explore the potential for an innovative use of Special Drawing
Rights (SDR), international reserve assets, and pools of concentrated assets to serve the aim of financing
green economy investments with attractive social as well as private returns and increasing the provision
of global public goods.

5.4 Nurturing green innovation and mobilising green technologies

Technology has historically provided the means by which humanity has addressed social and
environmental challenges. Policy making needs to strike a balance between incentivising investments in
new technologies and giving access to the social and environmental benefit of new technologies. Such
incentives help mitigate the risks associated with private sector investments in developing new
technologies to enable a shift towards a green economy. But these incentives must also be cognisant of
the need to maximise the benefit of these new technologies to society as a whole.

The UN system must continue to support Member States in their efforts to achieve this balance. It must
also continue to provide assistance in the building of innovation infrastructure in developing countries as
well as partnerships and capacity to transfer, adapt, and disseminate green technologies. Support for
efforts to facilitate the use of the global technology database provided by the patent system through the
disclosure of technologies in patent applications and tailored search tools such as IPC Green can
provide an inventory of green technologies that helps both innovation and technology transfer. Support
should also be provided for initiatives that create an efficient marketplace and platform for the sustainable
transfer of green technologies, making available both intellectual property rights and associated know-
how needed to implement a technology.

5.5 Contributing to the global economic recovery and success of Rio+20

The world has not recovered from the financial and economic crisis that broke out in 2008-2009. Recent
developments indicate a renewed set-back in the recovery driven by the unsustainable debt levels of many
industrial economies. The lingering crisis is causing damage to the world economy at large with serious
implications for poverty, social equity, and social stability as well as commitments to environmental
sustainability in all countries. Investments in renewable energy and energy-efficiency, sustainable
transport, sustainable agriculture, and other areas, however, hold a great potential to contribute to global
economic recovery. By fundamentally restructuring public spending and leveraging private investments
towards environmental and social investments, indebted industrial countries can expect to find new
growth paths that support fiscal consolidation while contributing to a green economy.

At a global level, Rio+20 provides an important policy opportunity in the near term for the UN system to
make commitments to support countries, including Least Developed Countries, in their efforts to move
towards a balanced and inclusive green economy. Agreement among UN entities on core elements of
strategy, policy, and programmatic services in support of governments green economy initiatives will
send a powerful signal to governments, businesses, and civil society of the determination of the UN
system to Deliver as One on a green economy transformation for sustainable development and poverty
eradication.